Huge negative equity on apartments.

Gauss

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

starbelgrade

You can hand in your keys to the bank, but you'll still owe them the money.

Valetta

You'd still owe all the money, just would have nowhere to live.

Immaculate Pasta

Your argument is quite clearly flawed, sir.

seamus

Handing the keys isn't an option as the debt isn't solely tied to the property.

Once the property has been sold, the bank will chase you for the balance of the mortgage, as they are legally entitled to do.

In fact, staying in the property is the better option since the bank are subject to all sorts of restraint in terms of how they can chase you for the money.

If you move out and hand back the keys, the property becomes an investment property and the bank are free to haul you over coals to get their money back.

However, it is a long-term issue which needs dealing with. Once it becomes apparent that there is no salvation forthcoming from negative equity a lot of people will just give two fingers to the banks and move abroad or stop paying altogether.

Gauss

Valetta wrote: »

You'd still owe all the money, just would have nowhere to live.

How about just rent another property and don't pay them back.

marketty

What's ridiculous now about a 400k mortgage for a flat that wasn't ridiculous 5 years ago?

SEPT 23 1989

I would head to the shores of the United Kingdom if i was in that position

minidazzler

Gauss wrote: »

How about just rent another property and don't pay them back.

You signed a legally binding agreement to pay them back. They will bring you to court and you will be told to do so.

Menas

Even if the bank did allow everyone to just hand back the keys then the debt would essentially be transfered to the taxpayer and the country would go down the swannie.

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

aidan24326

minidazzler wrote: »

You signed a legally binding agreement to pay them back. They will bring you to court and you will be told to do so.

You could still say no though. I'm not sure what legal repercussions there would be. Would jail be a possibility? Does anyone know of someone going to jail for refusing to pay their mortgage?

If there was no danger of going to jail I would move out, hand over the keys and simply refuse to pay it. There needs to be a debt sharing structure put in place. The banks should be forced to take on half of the negative equity, since they were instrumental in creating the mess that we now have.

Overthrow

Why should you care about the current market price of the place if you were planning on living there for the rest of your life? If you saw it as an investment property then you've nobody to blame but yourself for making a bad investment decision.

Gauss

marketty wrote: »

What's ridiculous now about a 400k mortgage for a flat that wasn't ridiculous 5 years ago?

It was ridiculous 5 years ago? People were socially conditioned to think it wasn't.

seamus

Trigger Happy wrote: »

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

Off-topic, but the actual source of the word and the "death" reference refers to the death of the obligation. A mortgage is an obligation which has a definite end - either when the debt is repaid or the property is repossessed. The idea that it only ends when you die is in fact the exact opposite of what "mortgage" intends.

I'm guessing the word comes from a time when a creditor (i.e. a landlord) could indefinitely hold an obligation over a debtor and/or their family no matter how much they repaid.

The Irish implementation of mortgage debt flies in the face of exactly what a mortgage is supposed to be, if implemented correctly all mortgages would be cleared by simply handing back the keys.

Youssef Chippo

SEPT 23 1989 wrote: »

I would head to the shores of the United Kingdom if i was in that position

They have banks and police there too you know

cournioni

Enough of this equity bollocks. If someone takes out a mortgage of €400k to buy an apartment then they have to pay back €400k. If you are buying to "invest", then you lost the bet, tough ****. If you are spending €400k to live in it then you're in the same situation as you were in years ago when you bought the apartment, you have to pay it back.

cloptrop

Trigger Happy wrote: »

Even if the bank did allow everyone to just hand back the keys then the debt would essentially be transfered to the taxpayer and the country would go down the swannie.

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

Jesus man dont be offerin suicide advice theres people at the end of their tether here.
Stop paying wait till you go to court . Dont pay get repossessed. Still dont pay get a letter in your door every week for ever.
Banks are gaurenteed by government . If nobody pays we need another bailout . Nama gets loads more houses pushing prices down further . Taxes increase to pay off second bailout .
Or you could just keep to your agreement of paying for your stupid investment . Like seriously400 000 for an apartment beside darndale . You kinda have nobody else to blame but you.

Ghandee

Do debts cross international borders?

Emigrate if they don't.

ejmaztec

seamus wrote: »

Off-topic, but the actual source of the word and the "death" reference refers to the death of the obligation. A mortgage is an obligation which has a definite end - either when the debt is repaid or the property is repossessed. The idea that it only ends when you die is in fact the exact opposite of what "mortgage" intends.

I'm guessing the word comes from a time when a creditor (i.e. a landlord) could indefinitely hold an obligation over a debtor and/or their family no matter how much they repaid.

The Irish implementation of mortgage debt flies in the face of exactly what a mortgage is supposed to be, if implemented correctly all mortgages would be cleared by simply handing back the keys.

Yes, it would be handy handing over the keys to clear a €400k mortgage and buying the property back for €50k.:pac:

Gauss

cournioni wrote: »

Enough of this equity bollocks. If someone takes out a mortgage of €400k to buy an apartment then they have to pay back €400k. If you are buying to "invest", then you lost the bet, tough ****. If you are spending €400k to live in it then you're in the same situation as you were in years ago when you bought the apartment, you have to pay it back.

Yes I agree, I still wouldn't pay it back though.

SEPT 23 1989

Youssef Chippo wrote: »

They have banks and police there too you know

they also have a progressive bankruptcy system that allows people to move on with their lives

cournioni

Gauss wrote: »

Yes I agree, I still wouldn't pay it back though.

Why not?

keithclancy

Ghandee wrote: »

Do debts cross international borders?

Emigrate if they don't.

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

markpb

keithclancy wrote: »

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

I don't think they issue bench warrants on foot of debts any more, not since they changed the law so you can't be incarcerated for unpaid debts. Could be wrong though.

Ghandee

keithclancy wrote: »

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

I reckon their should be a lot more issued to some politicians and bankers before they issue one for a man who walked away from a 400k mortgage.

Lando Griffin

Could be worse. You could be in an apartment block with only half the units occupied. Then again with so many on the housing list one would expect that such units be filled and reducing the list. Then at least you would be living in a vibrant exclusive apartment block like what was in the glossy brouchures.

Gauss

cournioni wrote: »

Gauss wrote: »

Yes I agree, I still wouldn't pay it back though.

Why not?

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

2rkehij30qtza5

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

I am one of these people.
I have the apartment rented out as I don't live in the same city.
I can't just hand back the keys to the bank as it would mean I'd never get a mortgage again the future for a house I want to make my 'forever' house. I'm only in my early 30's and have a young family so I can't jeopardise my future or my families like that. It's awful though....I basically work to pay the shortfall in the mortgage every month.

2rkehij30qtza5

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

I am one of these people. €425k mortgage and apartment worth about €150k at most if I am lucky.
I have the apartment rented out as I don't live in the same city.
I can't just hand back the keys to the bank as it would mean I'd never get a mortgage again the future for a house I want to make my 'forever' house. I'm only in my early 30's and have a young family so I can't jeopardise my future or my families like that. It's awful though....I basically work to pay the shortfall in the mortgage every month.

cournioni

Ghandee wrote: »

I reckon their should be a lot more issued to some politicians and bankers before they issue one for a man who walked away from a 400k mortgage.

Unfortunately, if you sign your name to promise to pay something back, you have to pay it back Ghandee. If everyone in the country walked away from their mortgages we would be in some state. You can blame the inflated prices and reckless lending on whoever you want, but at the end of the day if you sign your name away to something that you cannot pay back then you should be held accountable.

I am in my late 20's, I have never taken a loan out in my life, because I believe that if you don't have it, then you cannot spend it. A lot of people in this country saw loans as free money and we are all now paying the price for it. That is not letting the banks, developers or the government off the hook because they are equally to blame, but to say that people are blameless is completely wrong.

cournioni

Gauss wrote: »

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

You take on the debt then you have to pay it back. If you couldn't see the risk in taking out a loan then that is your problem, but don't make the problem mine just because of your mistakes.

Red21

If you paid 400k for a place in 2007, even at a good rate that's roughly €2000+ per month for 25 years, had a person been a few years younger and decided to stay at home for a few years saving their €2000 they'd have enough money to buy the same appartment within 4years and be dept free.
I'd be really pissed-off if I got stung like this, having so many pissed-off people cannot be good for society.

Duckjob

starbelgrade wrote: »

You can hand in your keys to the bank, but you'll still owe them the money.

Apparently it only works if you march in and "throw the keys back at them". So I've heard anyway...:pac:

JohnMarston

I dunno what would be going through your head buying an apartment for that ridiculous sum. With the repayments you've essentially handcuffed to the place for life.

Thanks but i think i'll keep renting. Not like i can take the place with me when i die

marketty

Gauss wrote: »

People were socially conditioned to think it wasn't.

Not me.
If you were in an average job and borrowing 10 times your annual income over 35-40 yrs,with very little if any deposit, for a box that you didn't plan on living in for the rest of your life, you were either very naive about basic economics or, as was often the case, you were trying to get 'on the ladder' and sell the place for a profit after a couple of years because of course the prices were only going to go up, in which case you were part of the reason things got so mental. Now I'm not saying the banks weren't responsible to some extent, of course they were, they engaged in some very dodgy lending practices and advertising to feed the frenzy, there is no arguing that. Unfortunately people got stung and stung big time when the **** hit the fan, but this idea that 'the banks' should have to absorb the losses just isn't going to work because we as a nation will end up taking on this debt, and we have enough problems as it is.

Ghandee

cournioni wrote: »

Unfortunately, if you sign your name to promise to pay something back, you have to pay it back Ghandee. If everyone in the country walked away from their mortgages we would be in some state. You can blame the inflated prices and reckless lending on whoever you want, but at the end of the day if you sign your name away to something that you cannot pay back then you should be held accountable.

I am in my late 20's, I have never taken a loan out in my life, because I believe that if you don't have it, then you cannot spend it. A lot of people in this country saw loans as free money and we are all now paying the price for it. That is not letting the banks, developers or the government off the hook because they are equally to blame, but to say that people are blameless is completely wrong.

Don't get me wrong, I agree ref the mortgage taken out, it should be paid back (you signed your name on it after all)

Im in negative equity (as are most of the country) I bought in 06 so the height of the boom, can't really complain though, we had to live somewhere, and obviously thought the price we were paying was worth it at the time.

I do however have an issue with the bank guarantee deal, and unsecured bonds being paid back. IMO, the the public (Irish tax payers) have been shouldered with a debt they never signed for. Unborn children will be paying back debt in years to come they had nothing to do with.

A few overpaid guys at the top, refused to share the wealth but have no problem sharing the debt out when the economy took a nose dive.

Overthrow

Gauss wrote: »

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

Jesus. What did you think you were signing up for?

Boombastic

Do all the people who didn't buy now get a free house, or can we choose to take the €400,000 cash?

cournioni

Ghandee wrote: »

Don't get me wrong, I agree ref the mortgage taken out, it should be paid back (you signed your name on it after all)

Im in negative equity (as are most of the country) I bought in 06 so the height of the boom, can't really complain though, we had to live somewhere, and obviously thought the price we were paying was worth it at the time.

I do however have an issue with the bank guarantee deal, and unsecured bonds being paid back. IMO, the the public (Irish tax payers) have been shouldered with a debt they never signed for. Unborn children will be paying back debt in years to come they had nothing to do with.

A few overpaid guys at the top, refused to share the wealth but have no problem sharing the debt out when the economy took a nose dive.

Totally agree with all of that. It's just a pity that others cannot/refuse to see it that way. It is a complete mess but we all have to work together to make things right. That goes for everybody, from the people on €1m+ per year to the people on €188 per week.

I think I'll rack up a load of debt on my credit card then hand it back to the bank and say "see ya"

Akrasia

marketty wrote: »

What's ridiculous now about a 400k mortgage for a flat that wasn't ridiculous 5 years ago?

Hey, that apartment probably had LEDs in the bath that Changed Colour!!

totally worth the money

Gauss

cournioni wrote: »

Gauss wrote: »

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

You take on the debt then you have to pay it back. If you couldn't see the risk in taking out a loan then that is your problem, but don't make the problem mine just because of your mistakes.

I agree, I'm not in negative equity. But if I found myself in such a scenario wher the negative equity is huge I wouldn't pay it back. I know it's wrong just like if I found a million euro it woul be wrong to keep it, but I still would.

Gauss

Overthrow wrote: »

Gauss wrote: »

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

Jesus. What did you think you were signing up for?

I don't have a mortgage.

markpb

cournioni wrote: »

Unfortunately, if you sign your name to promise to pay something back, you have to pay it back Ghandee.

I agree with you but why do you think countries have bankruptcy legislation?

Slurryface

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

And be pursued to the ends of the earth by the bank? eh , no.

Boombastic

Akrasia wrote: »

Hey, that apartment probably had LEDs in the bath that Changed Colour!!

totally worth the money

decking, I hope it had decking, yeah!

cournioni

markpb wrote: »

I agree with you but why do you think countries have bankruptcy legislation?

You're right, I'm sure you understand what I mean though, you have to make every attempt to pay back what you owe. You can not just drop it.

Brain Stroking

markpb wrote: »

I agree with you but why do you think countries have bankruptcy legislation?

To deal with people who are essentially insolvent. I dont think the point here is to do with those that simply cannot pay but more rather to do with those who wont pay.

If you take a mortgage you pay. Simple. Blaming banks and bondholders when you took out a 400k loan for an apartment is ridiculous in my opinion.

Larbre34

Ive done some work with Banks on their internal systems, mainly due to the fact they are shedding staff like billyo

What they are all doing is joining up the debt recovery effort across their mortgages, personal finance, credit card, leasing and everything else. Obviously the largest debt gets first call, but if you get a judgement against you, it will handcuff your ability to operate your life for a long time, unless you find a way to avoid all transactions.

It might be very tempting to do a runner or in effect post back the keys, but youre far better off doing a deal on your combined debt and at least being sure of what youre payments will be. It might require a deal of humility to make the first approach, but dont be shy about playing up the seriousness of your circumstances, youd be surprised how manageable a deal you could get, otherwise youll be looking over your shoulder and getting hassled for a very long time

Rigol

im with the op on this one. hand in the keys, declare bankruptcy, head abroad.
Let the state and bank do its worst...whatever that is it can't be much worse than sweating your life away for an apartment at 1/4 value.

P.C.

aidan24326 wrote: »

There needs to be a debt sharing structure put in place. .

No thanks.
I do not want to share your debt.