Debt Forgiveness Through The Backdoor

the groutch

http://www.irishtimes.com/newspaper/breaking/2011/1012/breaking18.html

Under each scheme, households in extreme mortgage distress who are eligible for social housing will be able to remain in their homes as social housing tenants with either the lending institution or a housing association taking ownership of the property.

so not only will they have their debt forgiven, but they'll jump straight into social housing, something that others have been waiting years for.

I sickens me that the wreckless borrowing of 2005-2008 is being rewarded like this, while those of us who pay our mortgage are going to get taxed to the hilt to finance their "bailout".

Crazy Horse 6

the groutch wrote: »

http://www.irishtimes.com/newspaper/breaking/2011/1012/breaking18.html



so not only will they have their debt forgiven, but they'll jump straight into social housing, something that others have been waiting years for.

I sickens me that the wreckless borrowing of 2003-2008 is being rewarded like this.

We love gambling in this country now we have actually gone a step too far in rewarding it.

ei.sdraob

Yeh thru "the backdoor" of taxpayers and honest/sane people who chose not to pay the monopoly game :rolleyes:

Nody

ei.sdraob wrote: »

Yeh thru "the backdoor" of taxpayers and honest/sane people who chose not to pay the monopoly game :rolleyes:

Will no one think of the children, and the poor, and the homeless and every other special interest group out there...

Debtocracy

the groutch wrote: »

I sickens me that the wreckless borrowing of 2005-2008 is being rewarded like this, while those of us who pay our mortgage are going to get taxed to the hilt to finance their "bailout".

Fair for some taxpayers, unfair for others. I can see the fairness of ditributing some of the good luck of an indivdual who bought a house in the 1990s at the start of the credit bubble, to compensate for the bad luck of those who bought in the 2005-2008 period, prior to the end of the credit bubble. One could argue that there's no luck involved and that the latter group were unintelligent for not forseeing the economic crisis. However, to do so would require categorising 99% of Irish people as stupid. The generation who bought their house in the 1990s would have acted in the exact same way as the current negative equity generation.

donalg1

Tis a bit crazy alright, how are the Local Authorities supposed to acquire these properties, are the banks gonna just transfer them to the LA, I mean the LA's have no money to acquire these properties. Even if they somehow manage to acquire these properties are the owners / tenants charged rent based on the differential rent scheme because if they are this hardly offers an incentive to try pay your mortgage off.

For example someone who'e mortgage repayment is €600per month, loses their job and are now on social welfare of 188 per week on the differential rent they would have to pay €38 approx rent a week or €158 per month. So by not paying their mortgage they just have to wait for the LA to take over and charge them rent saving themselves about 400 quid a month, sure that be grand we should all do that.

Ridiculous scheme, people borrowed money they could never afford to repay and they are rewarded then after a few years for being so reckless, tis a great country we live in.

ferike1

This will just give incentive to people to stop paying their mortgage.

_Kaiser_

This country just gets worse!

Owe enough (even collectively) and/or whinge enough about it and all your sins will be forgiven at the expense of those who didn't "go mad in the Good Times" and who ARE trying to pay their way and what they owe!

We really are a joke of a people that should not be at the controls of statehood because we're apparently not mature enough collectively to be trusted :mad:

Jaysoose

After reading that article especially the last few lines.. its obvious the goverment approached no groups for suggestions to solve this mess and took it upon themselves to come up with this hairbrained scheme.

This country and the goverment will never learn and its pouring good money after bad to sort people out that are incapable of making sound financial decisions or taking responsibility for them.

i despair..i really do.

ei.sdraob

Anyone seen the one on RTE news there? apparently getting to live in your home and renting instead from the state is not "good enough" :rolleyes: people really do want free homes :rolleyes: :rolleyes:

strandroad

Alison O'Riordan might qualify.

ei.sdraob

mhge wrote: »

Alison O'Riordan might qualify.

Cant wait for the article so

donegal11

what happens the mortgage debt? are the owners declared bankrupt? If not why would anyone struggle in negative equity when the state will buy it of them and then rent it at a reduced rate?

woodoo

Do they lose the home and rent it back from the state? Or will the home be theirs some day again?

I think if anyone has to enter this scheme they should relinquish any claim to the house and pay rent. If they don't keep up the rent payments they are out on their ear.

Glenj

This is insane, where is the fight in people, people have to be some bit responsible for their debts. About 6 years ago my husband and I had debts of over 60k after selling a home, we had 1 child at the time in full time childcare, we earned just over 50k. We made a decision that we were going to sort it out and made so many sacrifices, during that time we had a second child again in childcare.

Every penny we earned went to pay off our debts, I purchased toys at car boots, gladly accepted second hand clothes from relations, we've had no holiday in 6 years, I drive a complete banger, gave up smoking, stopped going out, budgeted €100 a week for shopping and so on.

By living off one wage, we managed to pay off most of our debt (approx 9k remaining) and saved a deposit for a new house, a few weeks ago we got a mortgage for a new home. It's a modest little cottage, we could have got something bigger but I've learnt my lesson, I will save the money for an extension.

I know some people are a lot worse off than we were but letting people off scott free is crazy, we learnt a valuable lesson and we're a lot stronger for it.

I have friends in arrears yet they still go to the salon to get their hair done, go drinking etc.

Also people's attitude in Ireland needs to change. When we sold our first home the amount of relations, friends who kept asking, did you buy a house yet, when are you buying a house, rent is such dead money, the pressure you are put under to have a home. People seem to view a house as a measure of how successful you are as a person, if you don't have a nice house in this country you're considered a looser.

Drumpot

Do I believe in debt forgiveness ? No, I believe in banks taking losses for bad loans they gave out . .

Do I believe people should be bailed out ? No, I believe the state has to take the same responsibility it is preaching to its people and show leadership.

People tend to have a "do as I say, not as I do" attitude to these kind of topics . . I believe the state has a responsibility to those who bought at the peak. The stamp duty, taxes and salaries that the property bubble covered was something everybody benefited by. Whether its with improved roads, certain public services or wasted public money on voting machines etc, it was money that the government strategically focused on and encouraged its people to engage in, which was supposedly going to benefit everybody.

Its funny cause if the whole property bubble had been done by a foreign bank that came in lending willy nilly to everybody and they had gone bust (at somebody elses expense) everybody would be saying "serves them right". Instead because the mise me fein attitude is usually rife in these forums, because the expense is actually on the taxpayer, its a case of selective responsibility . .

Our regulator allowed loans to goto people who should never of gotten them (110% mortgages etc), where is the states responsibility ? Why shouldnt taxpayers have to pay for their elected governments mistakes ? If you vote in turkeys , you deserve to be stuffed.

I believe in personal responsibility, but I believe if society expects individuals to be financially prudent and responsible it needs to lead by example instead of throwing stones from its hypocritical contradictory bubble. The person who purchased a house they could barely afford are no less responsible for their situation as the government that used the profits from this sale to run the country, the people who got payrises on the back of it and the general public who got the advantage of improved infrastructures or services.

Mr.Micro

Well, the bottom line appears to be, cut a deal with the lender if possible, or have your house taken by the bank, then rent the same house from the local housing authority or a housing association. All sounds very complex to me. What happens to the debts and what guarantee does a person get that they can rent their former home, and at what rent? Very complicated, but I suppose if its tailored its a start, at least provided it gets off the ground.

carveone

Glenj wrote: »

When we sold our first home the amount of relations, friends who kept asking, did you buy a house yet, when are you buying a house, rent is such dead money, the pressure you are put under to have a home. People seem to view a house as a measure of how successful you are as a person, if you don't have a nice house in this country you're considered a looser.

Which is why I have a certain amount of sympathy for people in that situation even though I don't own a house (or car/job/family) and have had to cut back to the bone just to hold my head above water.

In 2006, I was terribly worried that the manic situation in the States would cause an implosion there and that this would spill over to us; I was even trying to get my parents to sell up. (Didn't think it would be as bad as it became then).

However, the pressure for me to buy a house was still intense. You'll be left behind. You need to get on the ladder. We'll lend you money. Then it turns to threats - you just going to be homeless for the rest of your life; you're not going to get a wife the way you're acting; What Will The Neighbours Say. We're Praying for you. Then bypassing - my parents went to my bank to ask about a mortgage.

And the relentless sea of egotrip garbage (programs and ads) from RTE did not help. I think a lot of people bought to get these bolloxes off their backs or out of sheer terror or because all their friends were doing it. And now they're samaritans and have to be shunned until they pay for their sins...

Glenj

carveone wrote: »

And the relentless sea of egotrip garbage (programs and ads) from RTE did not help. I think a lot of people bought to get these bolloxes off their backs or out of sheer terror or because all their friends were doing it. And now they're samaritans and have to be shunned until they pay for their sins...

Absolutely those programs would drive you insane, even now "improve your home" you hear Dermot saying I've only a budget of 80k!!!!

hmmm

What a great country. We'll have half of D4 in trophy houses purchased by the taxpayer as "social housing", while renters and the poor saps who are paying their mortgages end up subsidising it all.

I agree with the recommendations re bankruptcy, but the idea that people can stay in houses they cannot afford and be subsidised by the taxpayer is wrong, both financially and morally.

strandroad

carveone wrote: »

And the relentless sea of egotrip garbage (programs and ads) from RTE did not help. I think a lot of people bought to get these bolloxes off their backs or out of sheer terror or because all their friends were doing it. And now they're samaritans and have to be shunned until they pay for their sins...

And now other friends who did not give in to peer pressure will bail them out.

max 73

This is a farce of an idea, I don't have a solution.

My wife has a full time permanent job, thankfully & I was made redundant last November & picked up an 11 month temp contract last June.

We have a mortgage & no other loans but once the mortgage, crèche & bills are paid there's not much disposal income left over. We can't really afford to do anything else or save after payday.

With the cost of living here rising on a daily basis, I would like to know why people cannot accept responsibility for the loans they took out and are now getting a bailed out while folks like us are treading water?????

Tea drinker

ei.sdraob wrote: »

Anyone seen the one on RTE news there? apparently getting to live in your home and renting instead from the state is not "good enough" :rolleyes: people really do want free homes :rolleyes: :rolleyes:

ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh:mad::mad::mad::mad::mad::mad::mad::mad::mad::mad::mad: fvcking whiney whingers.

and another thing, All these feckers compleining about negative equity and how much less than what their house is worth never factor in their rental costs over the period of their mortgage they seem to expect that they would have lived somewhere for free and not have spent 50-100 K on rent.
Can the media please start to include this in neg equity calculations otherwise we have to assume theses people are aliens from mars or somewhere.

golfnewbie

I hate when I see terms like the reckless spending of people between 2005-2008. The amount of good people who borrowed money who had 2 good jobs and probably at the time only envisaged their careers going in 1 direction might well be unemployed or surviving on 1 reduced wage.

Why do we always turn on ourselves??

The banks lent the money (sometimes wrecklessly) and have always had built-in mechanisms to write-off bad debt so why shouldn't they take the hit. They got €10billion already to cover bad debt from household mortgages but have not put that sum towards that use.

Wake me up everyone... we are just pawns in a very sick game... the recommendations in the report are to minimise social unrest and minimise banks' exposure... it was said in the news tonight that the government will borrow the money from the original borrowing institution!!!

this will substantially prolong our economic recovery and hit the middle working class the most (the ones least likely to cause civil unrest...)

Best of luck to New Beginning etc... they will need it against this banker friendly government..

Glenj

golfnewbie wrote: »

The banks lent the money (sometimes wrecklessly) and have always had built-in mechanisms to write-off bad debt so why shouldn't they take the hit.

In reality the banks will never be taking the hit, it is the taxpayers who will pay in the long term.

Scofflaw

Sorry to interject, but this is driving me mad - it's "reckless", not "wreckless." It's 'feckless' with an 'r'.

"Wrecklessly" isn't just wrong - it's almost the opposite of what's meant. If you're reckless, your life will be far from "wreck-less".

moderately pedantically,
Scofflaw

golfnewbie

Scofflaw wrote: »

Sorry to interject, but this is driving me mad - it's "reckless", not "wreckless." It's 'feckless' with an 'r'.

"Wrecklessly" isn't just wrong - it's almost the opposite of what's meant. If you're reckless, your life will be far from "wreck-less".

moderately pedantically,
Scofflaw

omg pedantic isn't the word i'd use.. in my quote i use the word twice in the same context but spelt it wrong in my haste.. doubt anyone else read it differently...

[MOD]The correction isn't aimed at you - I hadn't actually noticed your typo.[/MOD]

Flex

hmmm wrote: »

What a great country. We'll have half of D4 in trophy houses purchased by the taxpayer as "social housing", while renters and the poor saps who are paying their mortgages end up subsidising it all.

I agree with the recommendations re bankruptcy, but the idea that people can stay in houses they cannot afford and be subsidised by the taxpayer is wrong, both financially and morally.

Lesson to be learned from this is the next time theres an economic boom in Ireland make sure you bury yourself in debt. As soon as the downturn follows start complaining that you were tricked, nobody warned you an economy can have a downturn, its not 'fair' your house value dropped, etc. until you succeed in making your neighbour pay your bills. And if anyone tries to disagree with you just call them a begrudger or something.

Things like this confirm we're destined to continue being an economic backwater, its practically a tradition at this point.

Jaysoose

I think the point people seem to be missing is only a tiny portion of mortgages will qualify for this scheme.

The people that are hanging on to their jobs and still struggling trying to pay their mortgage will get no help whatsoever. If anything they will get punished with increased direct and stealth taxes.

This report is a disgrace and yet another complete waste of money by a qaungo set up by this incompetent goverment. This issue isnt going away though and next year after the latest raft of "austerity" measures things are going to get much worse for the very people expected to pull this country out of the ****.

Im not saying that debt forgiveness is the answer and people should accept the responsibility of their financial decisions but this report is like a slap in the face to the taxpayer.

Jaysoose

Flex wrote: »

Lesson to be learned from this is the next time theres an economic boom in Ireland make sure you bury yourself in debt. As soon as the downturn follows start complaining that you were tricked, nobody warned you an economy can have a downturn, its not 'fair' your house value dropped, etc. until you succeed in making your neighbour pay your bills. And if anyone tries to disagree with you just call them a begrudger or something.

Things like this confirm we're destined to continue being an economic backwater, its practically a tradition at this point.

Im sorry and this viewpoint will probably be met with disdain but none of these are happening at present so im struggling to see your point?

At best a tiny amount of mortgages will apply to this scheme.

The social state rolls on... from my understanding so far the plan implies that certain people may be spared the shame of being asked to leave their homes they can no longer pay for, kids attend same schools etc totally unknown to their neighbours at the cost of other more financially astute/plain lucky tax payers.. whilst the banks are once again afforded a win win situation.
This plan is a load of b0ll1x and will be wide open to abuse. If you can no longer afford your house for whatever reason then tough titty, the house should be handed back to the bank and the person should then be put on the social housing list like other people and move on from their.
Hopefully this plan is only being announced to keep the IMF happy and may not be really implemented. Revisions to insolvency laws in the new year will hopefully be more favourable to people who have had to hand their home back to a bank so as they are not left with a concrete block around their neck for such long periods...

Jaysoose

Deleted User wrote: »

The social state rolls on... from my understanding so far the plan implies that certain people may be spared the shame of being asked to leave their homes they can no longer pay for, kids attend same schools etc totally unknown to their neighbours at the cost of other more financially astute/plain lucky tax payers.. whilst the banks are once again afforded a win win situation.
This plan is a load of b0ll1x and will be wide open to abuse. If you can no longer afford your house for whatever reason then tough titty, the house should be handed back to the bank and the person should then be put on the social housing list like other people and move on from their.
Hopefully this plan is only being announced to keep the IMF happy and may not be really implemented. Revisions to insolvency laws in the new year will hopefully be more favourable to people who have had to hand their home back to a bank so as they are not left with a concrete block around their neck for such long periods...

There are couple of flaws in your argument, the council would actually own the house and as a lot of these people wont qualify for social housing in the first place rather than sparing them the shame of leaving their homes the reality is they would end up with nowhere to go.

People are getting very worked up over something that isnt even a realistic solution which if it does get pushed through wont apply to the vast majority of people in trouble.

Its a non runner.

Jaysoose

Jaysoose wrote: »

There are couple of flaws in your argument, the council would actually own the house and as a lot of these people wont qualify for social housing in the first place rather than sparing them the shame of leaving their homes the reality is they would end up with nowhere to go.

People are getting very worked up over something that isnt even a realistic solution which if it does get pushed through wont apply to the vast majority of people in trouble.

Its a non runner.

well then maybe their simply needs to be some reform to what determines a person to qualify.. i know housing lists are backed up but that is a whole separate issue, i just see this as the taxpayer once gain being shafted in favour of banks

CiaranC

Jaysoose wrote: »

There are couple of flaws in your argument, the council would actually own the house and as a lot of these people wont qualify for social housing in the first place rather than sparing them the shame of leaving their homes the reality is they would end up with nowhere to go.

They can rent

swim2

If this mortgage rent scheme works, does anyone know if the houses will have to be upgraded to a standard for social housing?
As far as I aware social housing have to be a certain high standard, and if they are not up to standard, who will pay for that upgrade??

Maura74

CiaranC wrote: »

They can rent

Of couse they can rent and that would free up more rented property which is badly needed in Ireland.

Jaysoose

CiaranC wrote: »

They can rent

What if they are broke?

CiaranC

Jaysoose wrote: »

What if they are broke?

Then they'll qualify for social housing

Jaysoose

CiaranC wrote: »

Then they'll qualify for social housing

What if they are self employed and dont qualify through the means test?

CiaranC

Jaysoose wrote: »

What if they are self employed and dont qualify through the means test?

Jesus, if they cant afford to pay for a mortgage, cant afford to pay rent and somehow dont qualify for social housing then they can get emergency housing in a B&B from the health board like the rest of the homeless in this country do. What sort of person would put themselves and their family in this position? I know junkies who manage to keep a roof over their head ffs

Jaysoose

CiaranC wrote: »

Jesus, if they cant afford to pay for a mortgage, cant afford to pay rent and somehow dont qualify for social housing then they can get emergency housing in a B&B from the health board like the rest of the homeless in this country do. What sort of person would put themselves and their family in this position? I know junkies who manage to keep a roof over their head ffs

I dunno maybe the sort of person that took out a mortgage that was based on their current salary and expected future earnings, maybe one or both of them lost their jobs there are a huge number of variables at work.

There are certainly people that made insane financial decisions of this there is no doubt and im not defending that. Its the outrage at the mere suggestion of a plan to help a small percentage of people affected which baffles me. The same outraged people sat on their hands when lenihan and cowen etc sold us down the river but when the subject of mortgage debt is raised people get all high and mighty..makes no sense.

I do know one thing its not as simple a scenario as you are trying to make it out to be. But then this wouldnt suit your view of the situation and would prevent you peddling a load of easy answers in this thread.

Its irrelevant anyway as at the end of the day this plan wont get off the ground its purely a stalling tactic by this goverment as they dont have the first notion what they are doing.

fliball123

Very Distressed at seeing this discussion going on...I am on the fence as I have a home in neg equity and would love for someone to come along and pick up the tab...But we are no longer a booming country we are infact in the sh1tter...But I also see the side of other people within this society that get stuff for nothing or for doing very little..This country should renamed ENTITLEMENT...and until all the perks over payment in the Public sector goes aswell as a good cut in social welfare peoples perception is that if you bitch and whine enough you get what you want

fliball123

A solution that should be looked at is see what a person has paid..Say for example a house was bought at 300k ..the person has paid 100...but is now only worth 150 and still owes 200k ..50k in neg equity and can no longer afford to pay the mortgage...Take the gaff and let them rent it and go on the initial figures of say they paid 1/3 of what was owed so in the future if this house is sold either at a profit or loss then that person gets 1/3 of the sale..This is the fairest way it means people have some equity still in the house and have an interest in maintaining it and they should be given say a 10 year period to be allowed buy the house at 2/3s the price as they have 1/3 in neg equity..The bank gets the loan amount for the 10 years and then sells after that...

Jaysoose

Jaysoose wrote: »

What if they are self employed and dont qualify through the means test?

again like i stated maybe the decision process needs to be revamped, i think self employed peoples entitlements could do with a revamp across the board, i know of people that created 5-10 jobs in the good times through their sole-trades who now do not even have the price of a slice pan as their businesses have folded and find it extremely hard to get any kind of assistance from welfare

Jaysoose

Deleted User wrote: »

again like i stated maybe the decision process needs to be revamped, i think self employed peoples entitlements could do with a revamp across the board, i know of people that created 5-10 jobs in the good times through their sole-trades who now do not even have the price of a slice pan as their businesses have folded and find it extremely hard to get any kind of assistance from welfare

So we can agree that its not quite as black and white a picture as some like to paint then?

carveone

Jaysoose wrote: »

So we can agree that its not quite as black and white a picture as some like to paint then?

Indeed. There seems to be a considerable amount of hostility on this thread towards those that could be perceived as having taken the risk, got on the ladder and now want to be bailed out. It isn't that clear a picture - there are levels here. There are those who speculated, those that thought they were on a free ride to the money trough and then there are the others who felt pressured into it. And there are those who bought in 2008 - ie: the banks lent them money knowing that the game was already up. And don't forget that the government was taking 9% each time. Nine percent ffs.

The problem isn't negative equity as such. I mean I have friends in negative equity who are meeting their mortgages and are fine where they are. That isn't an issue - they don't want any bailouts. It's like they own shares which are worth a bit less now. Life is hard, we keep on trucking. What others in that situation want is reasonable behaviour from the banks - who we own. But noooo. The banks refuse to be flexible and seem to be busy figuring out how to lock people in further.

It would appear that people are lining up to kick the hell out of those that are totally screwed and would be better off declaring bankruptcy (in the UK of course, NEVER in Ireland). Meanwhile Quinn is moving 200mill out of way...

never stated it was black & white.. but definitely agree it is not, still stand by my belief that banks should be left sort out mortgages cases by case with revamped insolvency legislation more favourable towards people who have got it wrong but gives them a chance to get up and start again in a quicker time frame. A plan like this will be slow and costly on taxpayers from an administration viewpoint also... banks already have staff and expertise in place to deal with this. This system would be wide open to abuse and imo would be abused given the history of abuse of welfare systems that are already in place in this country

carveone

I'd add that I (and others) were writing to TDs and senators back in 2009/2010 begging them to consider the mortgage crisis while the banks were being bailed out. Nope. One problem at a time please.

For example - by using troubled mortgagees as intermediates they could have helped both simultaneously while not bailing people out as such. Eg: I give the mortage holder 100k for the sole purpose of capital reduction (ie: it goes straight to the bank) in return for 125k of first lien equity in the house. You own 125k forever until the house is sold and the government gets actual equity instead of broken promises from banks. That's not a bad start...

Jaysoose

This is another problem the goverment are sitting on their hands doing sweet feck all about the issue for the last 3 years then they come out with some commissioned report from "experts" that suggest little to nothing to address the real issues and they expect a pat on the back.

People in this thread are suggesting much more credible solutions that a VERY well paid quango.

fliball123

Jaysoose wrote: »

This is another problem the goverment are sitting on their hands doing sweet feck all about the issue for the last 3 years then they come out with some commissioned report from "experts" that suggest little to nothing to address the real issues and they expect a pat on the back.

People in this thread are suggesting much more credible solutions that a VERY well paid quango.

True but sure I garentee there are people close to the gov on this quango ...As I have said the real problem in this country is peoples Sense of Entitlement ..People do little or fcuk all and expect to have their cakes and eat it..We are a nation of Mollycodled whingebags...

carveone

Deleted User wrote: »

never stated it was black & white.. but definitely agree it is not, still stand by my belief that banks should be left sort out mortgages cases by case with revamped insolvency legislation more favourable towards people who have got it wrong but gives them a chance to get up and start again in a quicker time frame.

I saw this this morning in the paper and I thought - about time they did something about that. Maybe there is hope after all. And then I remembered the 20 years I've been an adult and decided that I simply don't trust them. Since when have the government done anything except when beaten or embarrassed into it?

When added to this rental scheme madness, it paints a picture of a government that's decided that "something must be done". So it's going to commission this and create that and then do something so unutterably boneheaded it'll take your breath away. I can't wait