Mortgage debt forgiveness is here, Dublin nurse gets €152k debt write-down

daltonmd

Snakeblood wrote: »

Homes are investment products. If they weren't, banks wouldn't be lending people money to get them. They're not lending people money to buy them now because they're not good investments.

No they are not. If they were, then during the boom if someone owed 100k on a house, and sold it for 300k could the banks demand the value of the house back, instead of the outstanding loan??


They loaned money on the exact same priciple that people borrowed - and that is simply that the borrowers would never lose their jobs, suffer paycuts and that property only ever goes up.

The banks treated this like a no risk transaction. The risk in this case is not so much that the value of the property has plummetted, but so has the ability to pay for a lot of people.

I say fair play to the nurse - yes, as a renter and a taxpayer I'm paying for it - but I'd rather pay for a 100,000 people, than for one zombie, crooked, incompetant bank that was paramount in destroying this country.

JuliusCaesar

JuliusCaesar wrote: »

..............



The bank mishandled her case, and could have covered the mortgage outstanding if they had sold the house promptly.

Yet another example of banks not managing themselves properly.

You can be irate at the bank, not the nurse.

Could they f*ck have covered the mortgage, she handed the house back in 2009, the property bubble was well burst by then.

This case is an example of an individual not managing themselves properly, she had a €70k/annum job when she borrowed €245k, she didn't remain in the job and than found the mortgage repayments a struggle, which wouldn't be a shock to most people really.

ted1

if it could have been sold, then why didn't she do it on the open market?? with the proceeds of the sale she could have then paid the bank back.

ted1

ted1 wrote: »

if it could have been sold, then why didn't she do it on the open market?? with the proceeds of the sale she could have then paid the bank back.

Because then she would have had to take responsibility for it herself? People around here don't like that thought.

Monty Burnz

daltonmd wrote: »

I say fair play to the nurse - yes, as a renter and a taxpayer I'm paying for it - but I'd rather pay for a 100,000 people, than for one zombie, crooked, incompetant bank that was paramount in destroying this country.

What if the bill for one was a 5% increase in your income tax and the bill for the other was a 15% increase?

daltonmd

Monty Burnz wrote: »

What if the bill for one was a 5% increase in your income tax and the bill for the other was a 15% increase?

Monty - we've covered this time and time again - this is going to happen either way.

I fully expect to be down a further 20% in disposable income in the next 12 months.

This woman got a 150k writedown from BOI - and the CEO of the same bank got a 174k pension contribution last year bringing his total package to over 830k last year. I mean - seriously?

Galwayguy35

JuliusCaesar wrote: »

Can't see what everyone is getting so excited about, as most of you don't seem to have read the basis of her case, which isn't applicable to most people in negative equity.





The bank mishandled her case, and could have covered the mortgage outstanding if they had sold the house promptly.

Yet another example of banks not managing themselves properly.

You can be irate at the bank, not the nurse.

As a BOI customer I do be irate at them most days.

Monty Burnz

daltonmd wrote: »

Monty - we've covered this time and time again - this is going to happen either way.

You haven't thought about which will cost the taxpayer more? 100,000 people getting a 150k write-off will cost us what - €15,000,000,000 plus interest?

daltonmd wrote: »

This woman got a 150k writedown from BOI - and the CEO of the same bank got a 174k pension contribution last year bringing his total package to over 830k last year. I mean - seriously?

That's a whole other issue - let's not conflate them. Besides, I'd rather a competent guy got paid a million if it saved the taxpayer a few billion. I suppose we could get someone from the dole queue to do the job for minimum wage, but that may be a false economy.

daltonmd

daltonmd wrote: »

Monty - we've covered this time and time again - this is going to happen either way.

I fully expect to be down a further 20% in disposable income in the next 12 months.

This woman got a 150k writedown from BOI - and the CEO of the same bank got a 174k pension contribution last year bringing his total package to over 830k last year. I mean - seriously?

The point being that we(private citizens) should be paying for neither private pension contributions or private debt write-downs regardless.

Our bank-holdings are dropping significantly each year, your solution is to ram yet more government involvement into the banks.

daltonmd

Monty Burnz wrote: »

You haven't thought about which will cost the taxpayer more? 100,000 people getting a 150k write-off will cost us what - €15,000,000,000 plus interest?

Third scenario - 100,000 people going bankrupt? What's that going to cost us?

Monty Burnz wrote: »

That's a whole other issue - let's not conflate them. Besides, I'd rather a competent guy got paid a million if it saved the taxpayer a few billion. I suppose we could get someone from the dole queue to do the job for minimum wage, but that may be a false economy.

No comment.



@ Rojo - yes and my point is that I'd prefer to see citizens helped rather than banks.

Monty Burnz

daltonmd wrote: »

Third scenario - 100,000 people going bankrupt? What's that going to cost us?

You are still taking a very simplistic approach to this.

What do you think will happen to the numbers of people who are struggling with their mortgages at the moment who give up the struggle when they see debt forgiveness hoving into view? The number of 'hopeless' cases might suddenly double or treble - quite rightly, if we are incentivising non-repayment.

The numbers are not fixed: they are fluid. I guarantee you that if a rule was introduced that mortgage defaulters would be put to death, we'd suddenly find the number of defaults falling off a cliff. If we introduced a rule that repayment was optional, the number of defaulters will skyrocket.

You need to stop acting like we are talking about a fixed number of people all in the same situation. Some genuinely are hopeless cases and need bankruptcy, others are 'choosing' to struggle as they priorities luxuries they have become used to over paying their mortgage - and there are a lot of grey areas in between.

daltonmd wrote: »

@ Rojo - yes and my point is that I'd prefer to see citizens helped rather than banks.

This is a false dichotomy. If the citizens own (and work in) the banks, then their success is our success. But as before, I agree with you that we need to get away from the idea that the banks are sacrosanct and let them go bust if it is cheaper than saving them (as should have been done years ago - cheers FFail).

daltonmd

Monty Burnz wrote: »

You are still taking a very simplistic approach to this.

It is actually very simple - if people cannot pay then then they will at some point either default or go bankrupt - it really is a case of what's your poison.

Monty Burnz wrote: »

What do you think will happen to the numbers of people who are struggling with their mortgages at the moment who give up the struggle when they see debt forgiveness hoving into view? The number of 'hopeless' cases might suddenly double or treble - quite rightly, if we are incentivising non-repayment.

Monty this will happen in any event - this nurses case is the result of the banks taking the head in the sand approach. Incentivising non payment? There are 10's of thousands of people not paying all or any of their mortgages. Those who can pay should pay - and to keep bringing this up is very disingenuos of you, we have been through this time and time again.

Monty Burnz wrote: »

The numbers are not fixed: they are fluid. I guarantee you that if a rule was introduced that mortgage defaulters would be put to death, we'd suddenly find the number of defaults falling off a cliff. If we introduced a rule that repayment was optional, the number of defaulters will skyrocket.

I think you have misinterpreted what I have said - I never said we should write down 100,000 people's mortgages.

Re:Underlined - yes and if we introduced the same law to banks then you'd find the number of reckless loans would fall off a cliff - so what's your point?

Monty Burnz wrote: »

You need to stop acting like we are talking about a fixed number of people all in the same situation. Some genuinely are hopeless cases and need bankruptcy, others are 'choosing' to struggle as they priorities luxuries they have become used to over paying their mortgage - and there are a lot of grey areas in between.

I never said and never implied that this was the case, so I'll thank you to not put words in my mouth please.

daltonmd

Monty Burnz wrote: »

This is a false dichotomy. If the citizens own (and work in) the banks, then their success is our success. But as before, I agree with you that we need to get away from the idea that the banks are sacrosanct and let them go bust if it is cheaper than saving them (as should have been done years ago - cheers FFail).

And how do they get successful? With a crumbling mortgage loan book? Who makes them successful? Productive customers with jobs who can repay their debts or unemployed customers who can't?

They have to take their heads out of the sand and start acting now - whether you like it or not and whether I like it or not is absolutely irrelevant - it will happen, it has already started and it is the only way to we can recover.

Monty Burnz

daltonmd wrote: »

It is actually very simple - if people cannot pay then then they will at some point either default or go bankrupt - it really is a case of what's your poison.

So you think there is a fixed number of people who will default/go bankrupt regardless of the environment and incentives that are in place?

daltonmd wrote: »

I never said and never implied that this was the case, so I'll thank you to not put words in my mouth please.

Look at the line I quoted from the same post above - this is exactly what you are implying.

Actually, never mind. I genuinely don't think you understand the economics behind all this and I don't have the time or patience to explain it all.

JuliusCaesar

JuliusCaesar wrote: »

Can't see what everyone is getting so excited about, as most of you don't seem to have read the basis of her case, which isn't applicable to most people in negative equity.





The bank mishandled her case, and could have covered the mortgage outstanding if they had sold the house promptly.

Yet another example of banks not managing themselves properly.

You can be irate at the bank, not the nurse.

Define surrendering the property though. Did she throw the keys through the letter box and ignore their contact for years? While the value dropped like a stone

daltonmd

Monty Burnz wrote: »

So you think there is a fixed number of people who will default/go bankrupt regardless of the environment and incentives that are in place?

Look at the line I quoted from the same post above - this is exactly what you are implying.

Actually, never mind. I genuinely don't think you understand the economics behind all this and I don't have the time or patience to explain it all.

The only implication here is that the choices aren't great - and if you think my understanding is poor then can I say that your's is equally poor if you think that laws should be based on what a small part of the population "Might" do.

I understand very well that you can't get blood from a stone and the best solution is to try and work out a reasonable solution. I also understand very well that you can not bring in laws or changes that focus on those chancers who are everywhere in life - they're on the dole working or they evade tax.

You don't punish thousands of people in case a few of them are bad.

I have all the time and patience in the world and we will see who is right - for the record my point of view is that this WILL happen. You're is that it SHOULDN'T.


See ya monty.

nxbyveromdwjpg

Deleted User wrote: »

Define surrendering the property though. Did she throw the keys through the letter box and ignore their contact for years? While the value dropped like a stone

I don't know, but let's all assume that she did and continue to rant and rave about it in this forum.

Spiritofthekop wrote: »

As long as the keys to the house are handed back & the house is sold on in the current market at value for money price to the public

Value for money price to the public, what is that? As with most sales in a capitalist society it will be sold for the most they can get in the market at that time. There is a 152k debt on it after all.

Spiritofthekop wrote: »

& the person's who signed for the big loan's credit rating is stored so any future mortgage application be banned for 10/15 years & they must go through a severe stress test & a block on any future loans. I've no problem with it.

6 years is her application ban, which is probably plenty.

hmmm

daltonmd wrote: »

Third scenario - 100,000 people going bankrupt? What's that going to cost us?

Well then, what is it going to cost us? It's easy to figure out how much 100,000 x tax forgiveness will cost us. When someone goes bankrupt, their assets are seized and their income for several years will go towards paying off their debt.

If you're going to use the "but these people won't be part of the economy" argument then can I remind you that for every 1 euro they get in "forgiveness", that's 1 euro out of someone else's pocket.

riclad

We,,ll she how many people take advantage of this new bankruptcy law when it comes into effect.Theres alot of people just paying the interest on their loan.or getting
help from social welfare with their loan.
Theres alot of people on wages less than 50k, paying their mortgage, so i don,t understand why the bank
picked a nurse to write off such a large amount off the loan.
ITS like we have two societys in this country,
civil servants who have their wages and pensions protected and then the ordinary worker who
pays taxes to fund all this.

daltonmd

hmmm wrote: »

Well then, what is it going to cost us? It's easy to figure out how much 100,000 x tax forgiveness will cost us. When someone goes bankrupt, their assets are seized and their income for several years will go towards paying off their debt.

If they go bankrupt and are unemployed or have suffered an income decrease, then what exactly can the bank seize? Their dole, more money from dwindling disposable income?

Tthe bank get zero back except what they can sell the house for. In this climate I'd say it wouldn't be much, if they work to keep those who can pay a reasonable amount under whatever scheme is brought in then the bank claws back more.

If you're going to use the "but these people won't be part of the economy" argument then can I remind you that for every 1 euro they get in "forgiveness", that's 1 euro out of someone else's pocket.[/QUOTE]

RE: Underlined - How about allowing me to make my argument instead of making up one for me?


But on that note- every euro that we don't get back is coming out of someone elses pocket too.

antiskeptic

seamus wrote: »

The story is missing a lot of information. At her current ability to repay (presumably €250/month), it would take 55 years to repay the mortgage.

So for all intents and purposes she was bankrupt

I'd imagine that if you index-linked her repayments such that each one remained the same proportion of her wages during the life of the mortgage as 250 is now, then she'd be finished in 30 years or so.

About the life time of a mortage as it happens..

riclad

Even now 70k is cheap for a house in coolock, was it 3 bedroom, was it in bad condition?Was it in a council estate?
Maybe they went easy on her,shes single woman, and a nurse.

windward

riclad wrote: »

Even now 70k is cheap for a house in coolock, was it 3 bedroom, was it in bad condition?Was it in a council estate?
Maybe they went easy on her,shes single woman, and a nurse.

An apartment in Larch Hill in Coolock. Haven't seen anything on size, number of beds etc.

I think the settlement was reached because both sides knew they'd done wrong and it was nothing to do with sex or profession

Mr. Presentable

She's already complaining the monthly payments will keep her from buying a new car.

There is a clause that triggers the additional €120,000.00 debt if she misses one payment. Six years and never miss a payment? Her record suggests she'll hit the trigger.

Monty Burnz

Mr. Presentable wrote: »

She's already complaining the monthly payments will keep her from buying a new car.

Celtic Tiger sense of entitlement. Why should she have a new car, having defaulted on €150k?

Because she's worth it.

Rabidlamb

The poster child for evictions turns out to have 21 houses.
The poster child for debt forgiveness has a well paid PS job.
It's not going well on the PR front.

true

riclad wrote: »

Theres alot of people on wages less than 50k, paying their mortgage, so i don,t understand why the bank
picked a nurse to write off such a large amount off the loan.
ITS like we have two societys in this country,
civil servants who have their wages and pensions protected and then the ordinary worker who
pays taxes to fund all this.

very true. The bank should have evaluated if the nurse could have afforded to pay it before she took out the mortgage / it was sold to her. The nurse is highly paid so why does she get off? It would have been different if the mortgage was 10 or 15 times her income.

riclad

This case was mentioned on today fm,the bank took 2years to sell the house,they spent 1000,s on this court case.
THIS shows how stupid banks are.
IT should not take 2 years to sell an apartment,in those 2 years it lost maybe 30 per cent of its value.
See here
http://www.independent.ie/national-news/banks-dig-in-as-flood-of-mortgage-demands-is-forecast-3094692.html
apartments in dublin have fallen in value more than houses ,especially 1bed apartments.
http://www.independent.ie/national-news/i-wanted-to-pay-my-debts-but-now-im-effectively-bankrupt-3094820.html

so its the banks fault,she says the apartment was not in negative equity
when she gave back the keys to the bank.
They could have sold it for alot more than 70k.
Theres a lot of people who would be very happy to have a job in kildare.

daenerysstormborn3

How is it the bank's fault? If this woman had put her financial responsibilities as her top priority the situation would never have come about.

The_Conductor

riclad wrote: »

They could have sold it for alot more than 70k.

Perhaps in the peak they might have done.
Just keep in mind- its a 1 bed apartment in Coolock........
Its entirely possible that it took them 2 years to find a buyer- its very hard to sell apartments in good locations- even harder in those places that were hyped as the future of modern living.

Nothing against Coolock- but you'd seriously have your work cutout trying to sell apartments there (houses would be difficult enough- apartments a nightmare).

She handed the keys back- and is being allowed pay back a portion of the negative equity- while banned from borrowing or holding credit cards for 6 years. She certainly hasn't gotten off scott free by any measure. I'd love to hear a follow up on this- and see whether she keeps things up- or slips up, and whether the 120k judgement gets enforced.

Totally aside from anything else- it could be used by BOI and/or other institutions as a template for handling NE cases in future- hand the property back, a ban on borrowing or credit for 6 years, and a lien if the terms are broken.

Its not exactly word for word Proposal 2 in the Personal Finance Act- but its not a million miles off.......

The big difference here is she has handed back the property- the government doesn't envisage large numbers of people handing the keys back. Perhaps they should reappraise this?