The entrapment of 2 generations

Rabidlamb

My missus took redundancy 2 years ago, we've 3 kids under 5 so it's a no brainer.
She also got her own business up & running in the meantime so the extra cash is very handy.
Our lifestyle & mortgage is just about doable with one income.

Friends & neighbours tell us we're very lucky as they have no option due to mortgage obligations.
Grandparents are roped into minding the kids when they should be enjoying their 70's.
All of this because a mortgage provider allowed a 2nd income to be fully assessed for the application.
None of these financial experts or risk assessors ever factored in the chance of a woman getting pregnant, or indeed the dirty breeder would like more than one child.
Did they expect the couple to remain childless until inflation made it feasible ?.

My own controversial view is that banks should be told to go swing, the majority of blame here lies with the lender with their inability to factor in human nature, the need to reproduce.
If they can made compensate for mis-selling PPI then I don't see how this is any different.

Now, feel free to tear my argument apart.

TwoShedsJackson

About as much blame lies with the people who signed up for mortgages on those criteria. Did none of them think ahead to what might happen if they lost their job or had kids? People get child benefit when they have kids.

orestes

So you don't feel like you should pay your mortgage because you wanted to have kids you wouldn't be able to support? That's not human nature, it's selfish and irresponsible.

funk-you

Fairly simple mate, nobody forced anybody to borrow money. If you borrowed and you didn't take into account that things change in life it's your own fault. Not the banks, yours.

-Funk

seamus

The who's, how's or why's of the creation of the problem aren't really relevant.

If we tell the banks to go swing for it, then the debt ends up being the state's problem. The state tells the debtors further on up the chain to go swing for it and we lose all credibility on international money markets and will be unable to bring in any more money, meaning enormous tax increase (10% or more overall) and massive cuts in everything. Our economy is reduced to blubbering mess and foreign investors scarper.

One way or another, the debts will have to be paid by the Irish people. I prefer the course of action where we don't completely land ourselves in the toilet and have to crawl our way back out again.

No, Iceland didn't do that, and no we cannot do what Iceland did.

mikom

Is Catherine Zeta's arse gonna be in this one?

smash

TwoShedsJackson wrote: »

About as much blame lies with the people who signed up for mortgages on those criteria.

I don't really agree with this. The advice at the time was to buy before it became too expensive. Ffs banks were giving 110% mortgages and were advising people to buy 2nd properties for retirement incomes. Then on top of that they were handing out credit cards, personal loand and car loans to everyone.

kylith

I would also say that none of the people took into account their desire for a family when applying for the mortgage. It's not the banks' job to ask if you're planning on having kids, it's your responsibility to say 'I'll want to have kids, how might this impact on my mortgage repayments?"

TwoShedsJackson

smash wrote: »

I don't really agree with this. The advice at the time was to buy before it became too expensive. Ffs banks were giving 110% mortgages and were advising people to buy 2nd properties for retirement incomes. Then on top of that they were handing out credit cards, personal loand and car loans to everyone.

None of which has any bearing whatsoever on whether or not they should have signed up. No-one was forced to take out these mortgages, they did so voluntarily, and in probably the majority of cases, without fully thinking it through.

The people giving the advice were the people selling the product ffs.

mitosis

No gun to your head, no sympathy.

Sorry, OP, but did you factor in children when asking for and accepting the loan?

Rabidlamb

TwoShedsJackson wrote: »

About as much blame lies with the people who signed up for mortgages on those criteria. Did none of them think ahead to what might happen if they lost their job or had kids? People get child benefit when they have kids.

orestes wrote: »

So you don't feel like you should pay your mortgage because you wanted to have kids you wouldn't be able to support? That's not human nature, it's selfish and irresponsible.

funk-you wrote: »

Fairly simple mate, nobody forced anybody to borrow money. If you borrowed and you didn't take into account that things change in life it's your own fault. Not the banks, yours.

-Funk

Neither the regulator or the state did anything to protect people from their own greed & stupidity, the banks preyed on these flaws.

Iago

smash wrote: »

I don't really agree with this. The advice at the time was to buy before it became too expensive. Ffs banks were giving 110% mortgages and were advising people to buy 2nd properties for retirement incomes. Then on top of that they were handing out credit cards, personal loand and car loans to everyone.

Hands up if you were forced to take it.

No? Ok, hands up if you did your own due diligence on one of the biggest decisions of your life and one that was going to have an ongoing financial impact for probably 25-30 years.

No? Well then, hands up if while you were making the decision with your partner you worked out the impact when you had the children you would like to have and one parent would have to give up work.

No? Ah well, at least you made sure you didn't live beyond your means by showing some patience when it came to a new car, or buying one that was a bit older but within your budget. Taking two weeks locally instead of going on an expensive holiday, or at least ensured that your loans were manageable if you were down to one income so you were ready for a rainy day.

No? GTFO then

TwoShedsJackson

Rabidlamb wrote: »

Neither the regulator or the state did anything to protect people from their own greed & stupidity, the banks preyed on these flaws.

100% true, and still doesn't absolve people of what they signed up for. Let me put it this way, if the market was still going up, would you be saying that people should share the profits from their latest house flip with the State? Would you fu<k.

orestes

Rabidlamb wrote: »

Neither the regulator or the state did anything to protect people from their own greed & stupidity, the banks preyed on these flaws.

It's a bank, not a creche. What did you want them to do, hold your hand? You are an adult, you are responsible for your own stupidity and greed, and the consequences.

Rabidlamb

mitosis wrote: »

No gun to your head, no sympathy.

Sorry, OP, but did you factor in children when asking for and accepting the loan?

We were lucky, one income alone covered the cost.

who_me

The blame is widespread.

Banks offered loans & mortgages they shouldn't have. People applied for loans and took on high levels of debt they shouldn't have. The Government didn't regulate as they should have. The bond holders invested more and less wisely than they should have. etc...etc...

When you're weighing up a loan/mortgage, it's kind of hard to factor in the possibility of a global recession hitting the country hard. Nevertheless, any loan or mortgage comes with a high degree of risk, which everyone should be aware of. It's not just free money you can walk away with if your financial situation takes a turn for the worse.

NIMAN

You say

My own controversial view is that banks should be told to go swing, the majority of blame here lies with the lender with their inability to factor in human nature

First off, I think you are on a bit of a wind-up, but if you are serious, who is going to pay for this debt that the bank won't be able to get back from the people who willingly signed for it?

Answer, me and you.

When we signed for our mortgage, we had no kids, we have 2 now, but I am not hoping the bank gives me a break on mortgage, that would be just plain stupid.

curlzy

I've a good job, no debt and no mortgage. Have to say though I think people have very very very short memories, I remember having "the property ladder" shoved down my throat morning, noon and night, like seriously, I had people say "you're mad to be renting, would you not buy?" like I was mentally challenged or something.

The way I see it is this, if the government, the banks, the banking regulator and the whole global economy didn't see this coming how in good conscience can we blame Joe Public for not seeing it coming? I think it's fashionable or something now to be sh*tty to people who made the mistake of believing what EVERYONE believed. Personally, I think only a**holes go on about how their "taxes are funding other people mistakes" etc, it's makes me wanna kick some shins. I don't have a single debt but do I go on and on like people in horrific situations are idiots or something? It's like everyone has turned into Captain Hindsight and are only too pleased to pontificate to people that really don't need condescension at the minute, they have enough crap in their life without High Horse D*ckheads going on like they're so much cleverer.

Ahem..... so yeah that annoys me, the lack of unity Irish people display is disgusting. The public didn't cause this, successive govnernments, banks & banking regulation caused this. I have zero problems with people who did something as "stupid" as buying a house at the going price.

But then it's much easier to blame the little guy isn't it?:mad:

awec

There's far too much of this passing responsibility going on. You are responsible for your own actions.

Did people really think house prices were going to rise forever? There was always going to be a time when the arse fell out of it.

Hamiltonion

You don't have a right to have kids. Have em if you can afford em, planet is over populated anyway

P_1

To be fair you'd have to lay the blame equally.

The borrower should have factored in the probability of children happening later on when they were calculating their ability to repay.

The lender should have asked the borrower if they had factored in the probability of children happening later on when they were calculating their ability to repay.

Trouble is that the borrower was probably being bombarded with advertising/the general media/ their friends and family pestering them to 'get onto the property ladder before it was too late' and the lender was probably on commission to sell as many mortgages as they could and asking that question could well have hindered their ability to sell.

LuckyLloyd

Iago wrote: »

Hands up if you were forced to take it.

No? Ok, hands up if you did your own due diligence on one of the biggest decisions of your life and one that was going to have an ongoing financial impact for probably 25-30 years.

No? Well then, hands up if while you were making the decision with your partner you worked out the impact when you had the children you would like to have and one parent would have to give up work.

No? Ah well, at least you made sure you didn't live beyond your means by showing some patience when it came to a new car, or buying one that was a bit older but within your budget. Taking two weeks locally instead of going on an expensive holiday, or at least ensured that your loans were manageable if you were down to one income so you were ready for a rainy day.

No? GTFO then

Bingo

Iago

curlzy wrote: »

I've a good job, no debt and no mortgage. Have to say though I think people have very very very short memories, I remember having "the property ladder" shoved down my throat morning, noon and night, like seriously, I had people say "you're mad to be renting, would you not buy?" like I was mentally challenged or something.

The way I see it is this, if the government, the banks, the banking regulator and the whole global economy didn't see this coming how in good conscience can we blame Joe Public for not seeing it coming? I think it's fashionable or something now to be sh*tty to people who made the mistake of believing what EVERYONE believed. Personally, I think only a**holes go on about how their "taxes are funding other people mistakes" etc, it's makes me wanna kick some shins. I don't have a single debt but do I go on and on like people in horrific situations are idiots or something? It's like everyone has turned into Captain Hindsight and are only too pleased to pontificate to people that really don't need condescension at the minute, they have enough crap in their life without High Horse D*ckheads going on like they're so much cleverer.

Ahem..... so yeah that annoys me, the lack of unity Irish people display is disgusting. The public didn't cause this, successive govnernments, banks & banking regulation caused this.

But then it's much easier to blame the little guy isn't it?:mad:

Supply and demand. If the public weren't so determined to buy well above their means in the first place then the prices wouldn't have increased so much and people wouldn't be in the position they find themselves in now.

So yes, the public very much caused this.

Rabidlamb

Rabidlamb wrote: »

My missus took redundancy 2 years ago, we've 3 kids under 5 so it's a no brainer.
She also got her own business up & running in the meantime so the extra cash is very handy.
Our lifestyle & mortgage is just about doable with one income.

Friends & neighbours tell us we're very lucky as they have no option due to mortgage obligations.
Grandparents are roped into minding the kids when they should be enjoying their 70's.
All of this because a mortgage provider allowed a 2nd income to be fully assessed for the application.
None of these financial experts or risk assessors ever factored in the chance of a woman getting pregnant, or indeed the dirty breeder would like more than one child.
Did they expect the couple to remain childless until inflation made it feasible ?.

My own controversial view is that banks should be told to go swing, the majority of blame here lies with the lender with their inability to factor in human nature, the need to reproduce.
If they can made compensate for mis-selling PPI then I don't see how this is any different.

Now, feel free to tear my argument apart.

While I mostly agree with you, the cause of the situation is not the banks per say they are only responding to whats is going on in society. The cause is the modern capitalist consumerist society we live in plus ( according to some schools of though ) feminism.

Is there any economic evidence that the rise of the two income family has affected house prices?

A lot depends on your life style a one car/secondhand baby items/ living out side a major urban aera... is going to be cheaper to fund that living in a major urban area etc.

funk-you

Rabidlamb wrote: »

Neither the regulator or the state did anything to protect people from their own greed & stupidity, the banks preyed on these flaws.

Protect people from their own greed & stupidity? What a load of me hoop.

-Funk

orestes

mariaalice wrote: »

While I mostly agree with you, the cause of the situation is not the banks per say they are only responding to whats is going on in society. The cause is the modern capitalist consumerist society we live in plus ( according to some schools of though ) feminism..

Wait, whut?

Rabidlamb

funk-you wrote: »

Protect people from their own greed & stupidity? What a load of me hoop.

-Funk

When one old biddy wants to put her life savings on a 3 legged nag we all laugh.
When a whole country tries to do it they must be protected from themselves.

orestes

Rabidlamb wrote: »

When one old biddy wants to put her life savings on a 3 legged nag we all laugh.
When a whole country tries to do it they must be protected from themselves.

Are you honestly saying that you should not be held responsible for your actions as you are mentally unfit to have made the decision in the first place? Your own arguement is that you are stupid? Really?

MurdyWurdy

I think having a house bought before having kids is a bit of an obsession in Ireland though. I'm pregnant with my first and when I told one friend I was expecting she said "how can you be, you don't own a house?".

We decided it would be much better to have kids first so that we wouldn't be paying a mortgage on one salary (I'm going to give up work for a couple of years). We'd rather wait a few years until our kids are a bit older and we have two incomes again. We rent from a family member, who won't be kicking us out anytime soon at a reduced rate so the rent is very affordable (half of what a mortgage would be). Surely that's a much better situation? A few people seem to think we've been reckless though, getting pregnant now. I just can't understand that mindset.

smash

Iago wrote: »

Hands up if you were forced to take it.

No? Ok, hands up if you did your own due diligence on one of the biggest decisions of your life and one that was going to have an ongoing financial impact for probably 25-30 years.

Yea, did that.

Iago wrote: »

No? Well then, hands up if while you were making the decision with your partner you worked out the impact when you had the children you would like to have and one parent would have to give up work.

Did that too.

Iago wrote: »

No? Ah well, at least you made sure you didn't live beyond your means by showing some patience when it came to a new car, or buying one that was a bit older but within your budget. Taking two weeks locally instead of going on an expensive holiday, or at least ensured that your loans were manageable if you were down to one income so you were ready for a rainy day.

No? GTFO then

Yea, you see I could afford it all no problem and can still afford it but it's getting tougher considering that the costs of fúcking everything have gone up but wages haven't. This is the scenario a lot of people find themselves in.

orestes

orestes wrote: »

Wait, whut?

I am middle aged an in the 1980s it was very common to hear the argument you are making ( anyone ever listen to the Marion Funican or the Gay Byrne radio program in the 1980s )... and the answerer was to blame woman for being working mothers and to a lesser extent to blame womens rights.

Dodge

Love the idea that he blames the banks for not asking did the couple intend on having kids. HA ha.

HOW Dare that nasty bank approve the application we made!?

Rabidlamb

Dodge wrote: »

Love the idea that he blames the banks for not asking did the couple intend on having kids. HA ha.

HOW Dare that nasty bank approve the application we made!?

I blame the banks for not assuming kids were a likelihood & not factoring it into their risk assessment.

smash

Dodge wrote: »

Love the idea that he blames the banks for not asking did the couple intend on having kids. HA ha.

HOW Dare that nasty bank approve the application we made!?

Did you take out a mortgage during the boom? Most banks didn't even ask for reference letters or do proper checks. It was a case of "how much do you earn? Right we can give you 110% the value of the house...".

If people couldn't afford it then they shouldn't have taken the loan, but a lot could afford it and now can't. Not just because of children, but because of the economy.

donegal_road

what would the bank do if you had no choice but to walk away from it OP? or better again, if you had to emigrate to look for work.
They would have to sit it out, and see if you could somehow manage to juggle living abroad whilst paying for a house back here.
If you could, great... but if you found it impossible to make repayments, what are they going to do?.. send Inter-pol out looking for you? I dont think so

Scanlas The 2nd

smash wrote: »

I don't really agree with this. The advice at the time was to buy before it became too expensive. Ffs banks were giving 110% mortgages and were advising people to buy 2nd properties for retirement incomes. Then on top of that they were handing out credit cards, personal loand and car loans to everyone.

Agreed,Now I advise you to pm me all your credit card details.

Iago

smash wrote: »

Did you take out a mortgage during the boom? Most banks didn't even ask for reference letters or do proper checks. It was a case of "how much do you earn? Right we can give you 110% the value of the house...".

If people couldn't afford it then they shouldn't have taken the loan, but a lot could afford it and now can't. Not just because of children, but because of the economy.

Isn't this exactly the point I was making though. These are huge decisions based on 25-30 year timeframes. You only have to look at Irish history (never mind global) to see how that is likely to play out.

1920's - Growth
1930's - Recession
1940's - Relative Growth
1950's - Relative Growth
1960's - Significant Growth
1970's - Growth in first 5 years, recession in the second 5
1980's - Massive Recession (18% mortgage interest rate, 60% taxation, currency devaluation)
1990's - Celtic Tiger
2000 - 2005 - Celtic Tiger Maturity
2005 -2007 - Death Knells
2007- 2012- Global recession

The Irish economy has never been stable and is too small to ever be unaffected by what goes on in global terms. Proper due diligence should take into account interest rises, inflation, economic downturns etc.

Anyway, I'm not looking to hammer people while they're down, but the truth is that the public at large didn't prepare themselves adequately for these decisions and applied a short term at best ideology to decisions that were going to be life defining for them.

Scanlas The 2nd

Rabidlamb wrote: »

Neither the regulator or the state did anything to protect people from their own greed & stupidity, the banks preyed on these flaws.

Do you want the government to wipe your ass for you too?

Rented Mule

pithater1 wrote: »

The lender should have asked the borrower if they had factored in the probability of children happening later on when they were calculating their ability to repay.

This is all on the borrower. If they planned on having children, they should factor in all of their other responsibilities before taking on this loan.

smash

Iago wrote: »

You only have to look at Irish history (never mind global) to see how that is likely to play out.

Sorry, but shouldn't the banks know this more than the consumer?

starlings

if only we could harness all the energy people put into refusing responsibility and blaming others... some sort of denial dynamo... we could power the whole country and sell the excess. Failing that, we could put the time & effort to good use by living simply and cooperatively.

Scanlas The 2nd

smash wrote: »

Did you take out a mortgage during the boom? Most banks didn't even ask for reference letters or do proper checks. It was a case of "how much do you earn? Right we can give you 110% the value of the house...".

If people couldn't afford it then they shouldn't have taken the loan, but a lot could afford it and now can't. Not just because of children, but because of the economy.

And people should take into consideration the fact they may not be able to afford their mortgage at a future date. Our decisions in life have a risk-reward profile. If you want the reward be prepared for the risk and don't expect others to be punished for your own misfortune due to the decisions you made.

dollypet

So on the one hand you hear horror stories about the loans banks were giving out. I spoke to one person that was given a mortgage on thier house while only being on the dole.

Yes it did happen the banks in certain situations gave out stupid money to ppl that a blind dog would have predicted would not be able to pay back. That was bad business in my opinion and if a person thought they were in this situation they would have a case with the bank in question. There are ways to redress that situation.

However the situation you are refering to: Where you changed your own circumstances effectively by having children. THe bank is not going to ask you about future issues that may or may not arise.

You have a responsibility in this situation too.

As for telling the bank to go flip themselves... you could but I'd recommend you leave the country if you do this. With a wife and kids this might not be so easy to do.

I mean you still owe them the money. You give back the keys and say stuff if. Your house gets sold to the quickest bidder. Fair enough. More than likely in this climate there will be a shortfall. You still owe them the shortfall. You made a binding legal contract to pay the money back not the resale value of the house.

If you have the money to pay the mortgage and live, I would say keep on keeping on.

Iago

smash wrote: »

Sorry, but shouldn't the banks know this more than the consumer?

The banks responsibility is to make a profit, nothing more, nothing less.

The consumer should know that when they are making a decision that is going to impact on them and their families for the vast bulk of their remaining lives that they should first look at the worst case scenario and plan accordingly.

P_1

Dodge wrote: »

Love the idea that he blames the banks for not asking did the couple intend on having kids. HA ha.

HOW Dare that nasty bank approve the application we made!?

Rabidlamb wrote: »

I blame the banks for not assuming kids were a likelihood & not factoring it into their risk assessment.

Two sides of the same coin tbh.

What you have to remember was that in many cases during the boom, the risk assessment was more influenced by how much the banks stood to gain from the mortgage rather how much they stood to lose.

The type of couple who base the mortgage application on one income and who save a large deposit are rare but do exist, I think overall it is a very complex issue and a certain amount of it does come down to choices you make and the kind of life style you expect/want.

smash

Scanlas The 2nd wrote: »

And people should take into consideration the fact they may not be able to afford their mortgage at a future date.

They do, they take out mortgage protection or can get a moratorium if needs be.

Scanlas The 2nd wrote: »

Our decisions in life have a risk-reward profile. If you want the reward be prepared for the risk and don't expect others to be punished for your own misfortune due to the decisions you made.

People are being punished for the bad judgments of the banks, not the average Joe Soap. The average person bought a house to live in, the banks lent billions to people for pie in the sky development projects. But they don't care, cos they get paid anyway. I guess it's just easier to blame someone for buying a 3 bed semi though isn't it :rolleyes:

P_1

smash wrote: »

People are being punished for the bad judgments of the banks, not the average Joe Soap. The average person bought a house to live in, the banks lent billions to people for pie in the sky development projects. But they don't care, cos they get paid anyway. I guess it's just easier to blame someone for buying a 3 bed semi though isn't it :rolleyes:

That's risk/reward in action though.

From the borrowers side:
The reward: You have your house to live in, do do what you want with.
The risk: You can't afford the repayments and eventually the house gets taken away from you.

From the lenders side:
The reward: An profit of whatever the interest rate is
The risk: Losing money on the exchange if the borrower defaults.

It works the same as if you were to walk into a Paddy Power and bet a tenner on Man Utd beating Liverpool this Sunday at even money.

The reward: You gain a tenner if Utd win
The risk: You lose a tenner if Utd don't win

Rabidlamb

Back then to my example in the original post.

If you were trapped would you tell granny & grandad to go & enjoy their retirement or would you ask them to soldier on.

--Kaiser--

Is this thread for serious? If people get away with not paying mortgages that they freely agreed to, then I should get a bonus for not being financially irresponsible

Scanlas The 2nd

smash wrote: »

They do, they take out mortgage protection or can get a moratorium if needs be.


People are being punished for the bad judgments of the banks, not the average Joe Soap. The average person bought a house to live in, the banks lent billions to people for pie in the sky development projects. But they don't care, cos they get paid anyway. I guess it's just easier to blame someone for buying a 3 bed semi though isn't it :rolleyes:

I agree we shouldn't have been punished for the banks mistakes, likewise we shouldn't be punished because people can't pay their mortgages back.

If you borrow money and sign a contract to pay it back of your own free will don't expect anyone else to pay it back for you or for the borrower not to mind that you won't pay back their hard earned cash that they lent you.