Writing off mortgage debt

Monty Burnz

Here's an article that's a great example of the sort of routine bias you see in the media:

Cost of keeping roof over your head soars by €138 a week
That's before you buy food and clothes

THE average cost of keeping a roof over your head has soared from €275 to more than €400 a week since the boom -- due mainly to larger and more expensive mortgages.

That means couples now have to find €21,466 a year after tax, or an extra €138 a week, before they buy food or clothes.

The increase is five times higher than inflation and highlights the burden on families who have taken on mortgages since 2006. In many cases, couples are paying these higher bills on incomes cut by redundancy and higher taxes.

The figures were compiled by the Irish Independent based on data made available by the Central Statistics Office (CSO). While mortgages remain the single biggest element of increased expense, they also reflect stiff increases in the cost of home heating oil, gas and electricity, telephone, maintenance and repair, and insurance.

Recent increases in variable mortgage repayments have also added considerably to the burden on householders.

Interesting stuff, isn't it? Getting more expensive to put a roof over your head.

Read the whole article: they manage to write the whole thing without ONCE mentioning the word 'rent'. Renters are non-people.

creedp

Monty Burnz wrote: »

Here's an article that's a great example of the sort of routine bias you see in the media:



Interesting stuff, isn't it? Getting more expensive to put a roof over your head.

Read the whole article: they manage to write the whole thing without ONCE mentioning the word 'rent'. Renters are non-people.

This may be becasue rent has reduced over the same time period making it much easier financially for renters to keep a roof over their heads and under time honoured Irish journalistic principles, unless there is something sensational to say there is nothing to say!

Monty Burnz

creedp wrote: »

This may be becasue rent has reduced over the same time period making it much easier financially for renters to keep a roof over their heads and under time honoured Irish journalistic principles, unless there is something sensational to say there is nothing to say!

Regardless of whether it was more or less expensive, you would think that it would merit some mention in an article about how much it costs 'to keep a roof over your head'. But no, not a sausage. Second class citizens.

creedp

Monty Burnz wrote: »

Regardless of whether it was more or less expensive, you would think that it would merit some mention in an article about how much it costs 'to keep a roof over your head'. But no, not a sausage. Second class citizens.

One of the reasons why we are where we are ... the media ..

golfwallah

liammur wrote: »

They were able to see that the PS benchmarking etc was a further threat to the economy. You cannot say they were wrong, can you?.
Therefore even in opposition they were vastly superior to FF.

Calling for Public Sector reform in opposition and delivering on it in Government are 2 different things.

Accepted, some progress has been made ... but mostly on the low hanging fruit so far.

There is still a long way to go towards reducing public spending, of which public service pay is a very high percentage.

It's getting time to stop diverting attention with the blame game and get on with delivering on reducing Government spending / PS costs to more manageable levels.

I hope for all our sakes that Government succeeds in achieving their targets but the jury is still out in that regard right now.

buddhababe

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

Monty Burnz

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

'Struggling' is not the same as 'unable to pay'. My parents struggled to buy their house back in the 70s, furnished it one piece of furniture at a time, got extra work in the evenings etc. etc.

I wonder is anyone in government looking at this and seeing the can of worms that has been opened?

And I wonder are certain posters - who disagreed that the number of strugglers (and thus the cost to the taxpayer) was flexible depending on how we deal with this issue - still following the thread?

I hope you get through this sticky patch Buddhababe - life isn't always a bed of roses, as my parents could tell you! Don't be fooled into thinking that the Celtic Bubble was representative of how easy life usually is...

liammur

golfwallah wrote: »

Calling for Public Sector reform in opposition and delivering on it in Government are 2 different things.

Accepted, some progress has been made ... but mostly on the low hanging fruit so far.

There is still a long way to go towards reducing public spending, of which public service pay is a very high percentage.

It's getting time to stop diverting attention with the blame game and get on with delivering on reducing Government spending / PS costs to more manageable levels.

I hope for all our sakes that Government succeeds in achieving their targets but the jury is still out in that regard right now.

Yes, but the fact that they wanted reform was a big positive. Many PS workers got caught in the property trap after they were given unsustainable wages. I believe the FF government strategically rose PS pay to unsustainable levels to further fuel the property boom.

liammur

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

I would advise you to contact New Beginnings. Paying massive debts now is just silly, plain and simple. The banks' books have been written down for the likes of you, I would be giving back the keys if I were trapped in serious neg equity

Monty Burnz

liammur wrote: »

I would advise you to contact New Beginnings. Paying massive debts now is just silly, plain and simple. The banks' books have been written down for the likes of you, I would be giving back the keys if I were trapped in serious neg equity

I'd disagree with you there Liam - the banks have been recapitalised to cover expected defaults of people who simply can't pay (due to unemployment or whatever). They haven't been recapitalised to the extent that people who are just finding money a bit tight can voluntarily abandon their debts. It seems that Buddhababe is just finding money tight but is able to meet her obligations.

If we start sharing the debts of everybody, we are looking at another round of bank recapitalisations paid for by our taxes and those of our children and grandchildren. And every extra euro spent on this is a euro that can't be spent on hospitals, schools or law and order.

liammur

Monty Burnz wrote: »

I'd disagree with you there Liam - the banks have been recapitalised to cover expected defaults of people who simply can't pay (due to unemployment or whatever). They haven't been recapitalised to the extent that people who are just finding money a bit tight can voluntarily abandon their debts. It seems that Buddhababe is just finding money tight but is able to meet her obligations.

If we start sharing the debts of everybody, we are looking at another round of bank recapitalisations paid for by our taxes and those of our children and grandchildren. And every extra euro spent on this is a euro that can't be spent on hospitals, schools or law and order.

That is true, but the central bank today claim house prices are undervalued by 26%. So handing back keys is a gamble for both parties. I think it's ridiculous holding people to big mortgages against their wishes. There is no money in the economy as a result.

buddhababe

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

we're fcuked, lads.

:pac:

Monty Burnz

liammur wrote: »

That is true, but the central bank today claim house prices are undervalued by 26%.

They are talking out of their asses, as they did throughout the bubble. For informed discussion, have a look here.

liammur wrote: »

So handing back keys is a gamble for both parties. I think it's ridiculous holding people to big mortgages against their wishes. There is no money in the economy as a result.

But it's a zero-sum game - you have to take money out of the economy to pay the debts that these people are leaving behind anyway. There will be no new money in the economy!

liammur

Monty Burnz wrote: »

They are talking out of their asses, as they did throughout the bubble. For informed discussion, have a look here.

But it's a zero-sum game - you have to take money out of the economy to pay the debts that these people are leaving behind anyway. There will be no new money in the economy!

You make good arguments. Central bank can't have it everyway, on the one hand they forced banks to meet very stringent stress tests with a property price collapse, now they are saying prices could shoot up.

It's this type of scenario that tricked many people, hence I favour the U.S situation where the individual can hand back the property.

liammur

liammur wrote: »

You make good arguments. Central bank can't have it everyway, on the one hand they forced banks to meet very stringent stress tests with a property price collapse, now they are saying prices could shoot up.

It's this type of scenario that tricked many people, hence I favour the U.S situation where the individual can hand back the property.

But how exactly does one hand back a "60k topup"? Or what happens there?

liammur

Rojomcdojo wrote: »

But how exactly does one hand back a "60k topup"? Or what happens there?

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

liammur

liammur wrote: »

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

And what is "The bank would take the hit." code for?

liammur

Rojomcdojo wrote: »

And what is "The bank would take the hit." code for?

bondholders

Monty Burnz

liammur wrote: »

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

Who?

I agree re. letting the banks fail, but it's an article of faith with Irish politicians that this would be a total disaster.

Edit: Ah - the bondholders. Unfortunately they only get hit after the shareholders (the taxpayer) are wiped out. And I don't know if there are any bondholders left! The banks are now funder largely by the ECB - the same guys (more or less) who are funding our budget deficit...

liammur

liammur wrote: »

bondholders

Taxpayers, you mean?

liammur

Monty Burnz wrote: »

Who?

I agree re. letting the banks fail, but it's an article of faith with Irish politicians that this would be a total disaster.

Edit: Ah - the bondholders. Unfortunately they only get hit after the shareholders (the taxpayer) are wiped out. And I don't know if there are any bondholders left! The banks are now funder largely by the ECB - the same guys (more or less) who are funding our budget deficit...

Shareholders have been wiped out apart from BoI.
We are looking at creating 2 pillar banks i.e. 2 banks that once again will be too big to fail. Banks like AIB should be allowed go bust. This bank has cost the taxpayer €20bln already. If people give back the keys, this figure will rise and it should be allowed fail.

What we need are smaller banks, and people will just have to be more careful where they put their savings etc.

Monty Burnz

liammur wrote: »

What we need are smaller banks, and people will just have to be more careful where they put their savings etc.

Agree 100% there. But can you imagine the bleating when people lose their life savings in a collapsed bank?

liammur

liammur wrote: »

Shareholders have been wiped out apart from BoI.
We are looking at creating 2 pillar banks i.e. 2 banks that once again will be too big to fail. Banks like AIB should be allowed go bust. This bank has cost the taxpayer €20bln already. If people give back the keys, this figure will rise and it should be allowed fail.

What we need are smaller banks, and people will just have to be more careful where they put their savings etc.

What savings will anyone have once the banks go bust?

If you're assuming that the taxpayer can bail out not just the lenders, but the borrowers and THEN the savers, I would imagine your position lacks realistic foundations.

We're just about keeping our heads above water at the moment. Look at Spain and Italy - the EU will have much bigger fish to fry in the next few weeks/months without Ireland jockeying for position as the next Greece.

Fighting Irish

If a bank fails, so you lose all your savings with that bank, if you do not withdraw quick enough?

liammur

Monty Burnz wrote: »

Agree 100% there. But can you imagine the bleating when people lose their life savings in a collapsed bank?

Correct. But B of Irl management have moved their money out of BoIrl. Taxpayers shouldn't be expected to bail out people who prefer the read X-factor on the Sun. People need to up their game in these matters.

___
Top management at Bank of Ireland have shifted almost €30m of their own money out of the bank since the start of 2010.



The bank's annual report reveals that "key management personnel" (KMPs) held as much as €39.7m in personal deposits at the bank in 2010. By December 2011, that figure had dropped to €11m.
Chief executive Richie Boucher, who was paid a staggering €831,000 last year, and governor Pat Molloy are listed as "key management personnel". The bank's non-executive board members, group executive directors as well as other high-ranking bankers are also included.
It is not clear which of the key insiders reduced their deposits with the bank. Up to 22 top executives had major deposits with the bank last year, down from a peak of 26 in 2010.

http://www.independent.ie/business/boi-bosses-move-29m-of-own-cash-out-of-bank-3053970.html

golfwallah

liammur wrote: »

Yes, but the fact that they wanted reform was a big positive. Many PS workers got caught in the property trap after they were given unsustainable wages. I believe the FF government strategically rose PS pay to unsustainable levels to further fuel the property boom.

I would prefer to judge government performance by what they do when in power rather than what they said when in opposition.

As for the FF government strategically increasing PS pay to fuel the property boom ...... now really ...... let's just wait to see how the current crowd do, over and above letting natural wastage and early retirement reduce PS pay costs.

Maybe then, they'll have to have another look at the fine print in the Croke Park Agreement about government debt related to GDP, etc. And harder still, do something about it ..... the plot thickens!

liammur

Fighting Irish wrote: »

If a bank fails, so you lose all your savings with that bank, if you do not withdraw quick enough?

Exactly, that's why deposits have flowed out of the banks, happening in Greece on a daily basis. Government doesn't want this to happen of course, because it can cause a bank to collapse.

Monty Burnz

liammur wrote: »

Correct. But B of Irl management have moved their money out of BoIrl. Taxpayers shouldn't be expected to bail out people who prefer the read X-factor on the Sun. People need to up their game in these matters.

Again, I agree - but what were people who were taking out top-up loans of 60k in 2007 reading? I don't think they should be bailed out either - especially as they probably blew the money on flash cars and holidays to impress their friends.

liammur

Rojomcdojo wrote: »

What savings will anyone have once the banks go bust?

.

How long more do they need to move their savings?

liammur

golfwallah wrote: »

I would prefer to judge government performance by what they do when in power rather than what they said when in opposition.

True, but you were the one who said this:

'As for blaming FF on everything, and some senior people in FF Governments do have cases to answer ...... always good to be able to blame someone, even if all the opposition during the bubble were calling for even more spending at the time'.