Ireland, where repaying your mortgage is optional

Anynama141

Remember all those people who told you (and continue to tell you) that moral hazard is not a problem? Well have a look at this graph that compares the level of mortgage arrears with that of other European countries (including Greece and Spain, where unemployment is well over 20%)...



That enormous debt, if not paid by the people who borrowed it, will largely be paid out of your taxes, that you would probably prefer to be spent on hospitals, schools, roads, policing and such, or left in your pocket for you to spend.

There's a good article here where the chart features heavily.

But the growing pile of defaulting home loans holds other risks for Ireland. For one, it’s choking off the flow of capital to the economy.

Let’s remember why we even bother putting up with banks. They’re supposed to be good at doling out capital efficiently. They take the unused savings of society and channel it toward productive uses—at least in theory. But if banks coming out of a financial crisis start practicing widespread forbearance and evergreening of loans, they become less and less efficient at their job, because so much of their capital is tied up in bad loans instead of getting put to good use.

That’s part of what’s happening in Ireland right now. You can see, mortgage lending has pretty much collapsed.



Now, lending would logically fall after a financial crisis triggered by too much debt. But it will have to stop falling before the domestic economy starts growing.

That’s why Ireland must overcome its anti-eviction tendencies and clear the backlog of bad loans. And it’s not just the homeowners that will feel the pain through necessary foreclosures and repossessions. Banks must fess up to their losses and restructure bad debts.

It won’t be pretty or easy. But for the Irish government—so often dominated by the European powers that bailed the country out—it’s one of the few areas where it can still act. As for the European officials who have built Ireland’s painful austerity push into the “model” response for troubled European countries? They’re going to have to admit even supposedly virtuous Ireland is having serious difficulties making austerity work.

Anynama141

By the way, for those of you looking to buy a place - why do you think it is so hard to find a good property? Could it be because there are over 100,000 properties occupied by people who aren't actually paying the mortgage?

RATM

I think that chart gives truth to the lie that strategic defaults in Ireland are not off the scale.

It makes you wonder what is it that is different here compared to the other countries who are facing just as much austerity as we are. Why are they still paying their mortgages and we are not ?

Blackjack

RATM wrote: »

I think that chart gives truth to the lie that strategic defaults in Ireland are not off the scale.

It makes you wonder what is it that is different here compared to the other countries who are facing just as much austerity as we are. Why are they still paying their mortgages and we are not ?

Personal responsibility. "The Bank made me borrow all this money".

keith16

RATM wrote: »

I think that chart gives truth to the lie that strategic defaults in Ireland are not off the scale.

It makes you wonder what is it that is different here compared to the other countries who are facing just as much austerity as we are. Why are they still paying their mortgages and we are not ?

It would hazard a guess that reposessions are happening in other countries - in other words, the data for the other countries are sustainable, because the unsustainable ones have been taken out of the equation.

Anynama141

Blackjack wrote: »

Personal responsibility. "The Bank made me borrow all this money".

Don't forget the meeja and Bertie.

yosser hughes

What's going on in this country is gombeenism and it's promoted daily by the likes of David Hall of New Beginnings who seems to have a residency in RTE.
The narrative of" it 's all the banks fault" has been relentless since 2007. Those who cheerled the property bubble are now cheerleading the debt forgiveness/strategic default. Except they are denying that strategic default is going on at all.
this country will remain screwed as long as rising property prices is greeted as good news and a sign of 'recovery' and also as long as supply is restricted by people being allowed live in their houses for free.
That's not to mention the vast vast amount of Buy - to -let investors who are pocketing the rent and not repaying their loans either.
It's an ongoing farce. The country will suffer, remain unsustainable and the taxpayer will pay for it.

Anynama141

Here's an example of what is going on with some of these mortgages, from Askaboutmoney...

Thread Title:

unsustainable mortgage in negativ equity - how best to proceed?

Details of the 'unsustainable mortgage'

property -
Lender: Bank of Ireland
Amount outstanding: 272,000
Value of home: 125,000
Interest rate: tracker,
Monthly repayment 1142 euro
Amount in arrears 0
Monthly rent received 750 (but currently tenant 2,200 in arrears) - trying to currently evict/ clear tenant and 'start again;

And the income of the borrower:

Sorry - current salary is £110,000 GBP. Apart from ongoing bills electric, gas, council tax, etc, No other current commitments

£110,000 = €130,000

Eric Cartman

this personal insolvency bill is the greatest load of rubbish to ever come along, It has caused people to actually hold off on payments to dump their unwanted houses back to the markets. These are the same people who will complain when taxes increase in every budget. You cannot get something for nothing, and these people are actually ruining our country.

Blackjack

Anynama141 wrote: »

Here's an example of what is going on with some of these mortgages, from Askaboutmoney...

Thread Title:

Details of the 'unsustainable mortgage'

And the income of the borrower:

£110,000 = €130,000

"Unsustainable" in the modern context means "worth less than I paid for it and I'm ticked off that its no longer the cash cow/golden cow I could boast to my mates about at dinner parties".

EricPraline

Blackjack wrote: »

"Unsustainable" in the modern context means "worth less than I paid for it and I'm ticked off that its no longer the cash cow/golden cow I could boast to my mates about at dinner parties".

Talk about stretching the term "unsustainable" to its limits. €130k gross is over €6000 net income per month, excluding the €750 gross rent per month. And they want to get out of paying €1142?

Unfortunately Sean Dunne's pending escape from his debts will inspire many savvy copycats to attempt likewise.

Joe Hart

Anynama141 wrote: »

Here's an example of what is going on with some of these mortgages, from Askaboutmoney...

Thread Title:

Details of the 'unsustainable mortgage'

And the income of the borrower:

£110,000 = €130,000

You get one of those every day on that site. That is reality, people suffering serious buyers remorse and they want to foist their problem on us.

Duckjob

Anynama141 wrote: »

Here's an example of what is going on with some of these mortgages, from Askaboutmoney...

Thread Title:

Details of the 'unsustainable mortgage'

And the income of the borrower:

£110,000 = €130,000

It's unsustainable if he wants to keep his golf membership and little Lucinda's pony farm.

lima

You are as rotten a scumbag as dunne if you are not paying your mortgage when you have the funds to do so and you should pay. those Irish who are choosing not to pay are as bad a scum as those out robbing iphones on the streets in Dublin.

I have cash in my hand waiting for housing stock to become released and it is incredibly frustrating that the smug feckers from the boom who caused this bubble (the Irish public) are trying to weasel their way out of their financial commitments. Shame on them. They are not Irish in my eyes.

Ray Palmer

Duckjob wrote: »

It's unsustainable if he wants to keep his golf membership and little Lucinda's pony farm.

If you read the thread the OP in it never suggested not paying back his loan. The "unsustainable" was probably misused by the OP in the thread title.
The OP wants to know how to carry his debt to the next property.

I am sure there are people out there who have chanced their arm to see if they will be able to get debt written off but could afford their loan. THe chart here is interesting but also not really saying very much. We have different laws here that pretty much stop repossesions hence we have a high figure. It will be addressed and should probably already been done but public opinion is a big deal on this issue.

The things is how many of these properties are in the areas with rising house prices? There are going to be a portion but it will likely be a smaller portion as the areas of high employement are likely to be areas people can afford to pay their mortgages.

frfintanstack

Anynama141 wrote: »

Here's an example of what is going on with some of these mortgages, from Askaboutmoney...

Thread Title:

Details of the 'unsustainable mortgage'

And the income of the borrower:

£110,000 = €130,000

Good work, you managed to leave out this pertinent detail...

What is your preferred realistic outcome?

The house will never regain full amount I paid for it and l do not anticipate ever be in a position to repay the loan fully. So I would prefer to sell the house and deal with the shortfall

Anynama141

frfintanstack wrote: »

Good work, you managed to leave out this pertinent detail...

What is your preferred realistic outcome?

The house will never regain full amount I paid for it and l do not anticipate ever be in a position to repay the loan fully. So I would prefer to sell the house and deal with the shortfall

He says he doesn't expect to pay the loan in full, and when he says 'deal with the shortfall', presumably he means dump it on the taxpayer - otherwise he IS repaying the debt in full, isn't he?

murphaph

lima wrote: »

You are as rotten a scumbag as dunne if you are not paying your mortgage when you have the funds to do so and you should pay. those Irish who are choosing not to pay are as bad a scum as those out robbing iphones on the streets in Dublin.

I have cash in my hand waiting for housing stock to become released and it is incredibly frustrating that the smug feckers from the boom who caused this bubble (the Irish public) are trying to weasel their way out of their financial commitments. Shame on them. They are not Irish in my eyes.

I don't get you. If this dude pays his mortgage, which he should, then his property won't "become available" (to you at a discount, which is really what you meant, right, because there are properties available right now).

I don't believe for a second that this sort of character should have one penny in debt forgiven, but you have other issues clearly.

murphaph

Anynama141 wrote: »

He says he doesn't expect to pay the loan in full, and when he says 'deal with the shortfall', presumably he means dump it on the taxpayer - otherwise he IS repaying the debt in full, isn't he?

Exactly. "Deal with the shortfall" does not mean "repay the shortfall in full" otherwise the solution is clear....continue as he is renting it out and subsidising the mortgage payment from his nice salary. Doing anything else if he intends paying the debt in full would be stupid as he'd be paying the same debt but be left with no asset at the end. He is also paying very little tax on that rent as most of his mortgage repayment will be interest at this stage.

lima

murphaph wrote: »

I don't get you. If this dude pays his mortgage, which he should, then his property won't "become available" (to you at a discount, which is really what you meant, right, because there are properties available right now).

I don't believe for a second that this sort of character should have one penny in debt forgiven, but you have other issues clearly.

I am responding to the original post. Do you get me now?

There are currently no discounts on property right now, they are still worth more than they should. This is because of people refusing to pay their debts because their houses are worth less than what they owe back.

As soon as repos happen then a more natural amount of stock will be available on the market, and there will be more choice for (first time) buyers like me.

I wasn't around for the 'boom', I chose to live abroad, but now I'm back and those people refusing to pay their dues are preventing property prices from reaching their true worth.

The_Morrigan

I think Ireland, and especially the Irish banks have always been adverse to repossessing houses. I used to work in one of the main retail banks and it was never on the list of priorities if someone got into trouble with their mortgage. My father for many many years also worked for one of the retail banks and it was the very very last resort for any of the branch managers (this was before everything was centralised and decisions were taken from the local networks) and even when the decisions were taken to the mortgage centres he still had powers to put a moratorium in place and provide alternative resolutions to people.

However, since the crash the one thing that both of us have encountered is that Joe Public has a hatred for the banks and a lot of people will now accept no responsibility for any loan they took out over the years with the accusations of the banks throwing money at them and it is all their fault yadda yadda yadda... these eejits are making it worse on those that are genuinely struggling and are attempting to make every payment they can.
I have no time for people who refuse to co-operate with the banks, they walk into the banks with a chip on their shoulder before any negotiations start, and just out right refuse to do anything other than hand back the keys and walk away expecting the outstanding debts to be written off. This behaviour is backing the banks into corners meaning they have less resources to be lenient with those that are trying to sort out their debt problems.

murphaph

lima wrote: »

I am responding to the original post. Do you get me now?

There are currently no discounts on property right now, they are still worth more than they should. This is because of people refusing to pay their debts because their houses are worth less than what they owe back.

As soon as repos happen then a more natural amount of stock will be available on the market, and there will be more choice for (first time) buyers like me.

I wasn't around for the 'boom', I chose to live abroad, but now I'm back and those people refusing to pay their dues are preventing property prices from reaching their true worth.

I admire your optimism, but I don't believe we're gonna see fire sales by the banks. You could waste your whole life waiting for something that may never happen.

lima

murphaph wrote: »

I admire your optimism, but I don't believe we're gonna see fire sales by the banks. You could waste your whole life waiting for something that may never happen.

I'm happy renting and I'm not going to get rushed into the biggest purchase of my life and that's the attitude every potential buyer should have, despite what EA's & Irish Independent try to push. I get a distinct feeling that a mini bubble is being invented and it needs to stop.

Ray Palmer

lima wrote: »

I'm happy renting and I'm not going to get rushed into the biggest purchase of my life and that's the attitude every potential buyer should have, despite what EA's & Irish Independent try to push. I get a distinct feeling that a mini bubble is being invented and it needs to stop.

I think it is hilarious the way people go on about vested interests creating a bubble and how they are able to be successful.

I was about as were many others here and that isn't how it happened. The EA's and the papers didn't spur on house prices people did. People buying forced up prices by offering more. They lied on applications, they decided houses within 100s metres of each other were worth massively different money.

You can argue the banks gave out more money to fuel it but it was always the people buying pushing. People insisting on more houses to be built, PP be relaxed etc... The banks and government did what people wanted. The papers responded to public desire and everybody talked property. It is like blaming recipes in the news paper make people fat when in actual fact not that many even are made and the same goes for property supplements info. Most were actually about design and lots of ads for houses for sale.

Many people didn't do basic maths on the purchase of their houses.

There are some interesting aspects to what people are buying now. It is 3 bed semis near employment. Nothing wrong with apartments but people have been burnt by them now so they will become the next slums in many areas. Planning permission was granted for many due to public pressure. It is too simplistic to blame banks, EA and the media because mostly they act on what is happening not cause it.

People like to disown their own involvement and blame what they don't understand.

The_Morrigan

Ray Palmer wrote: »

........You can argue the banks gave out more money to fuel it but it was always the people buying pushing. People insisting on more houses to be built, PP be relaxed etc... The banks and government did what people wanted....

This is important...the amount of people who lied on their applications was unbelievable. I know a lot of people who would have taken a loan from the credit union for their deposit because the credit union didn't show up on the credit reports, not disclose that amount in the mortgage application and then come back in a year or two later looking to renegotiate the repayments because they couldn't pay both. The banks could only work off what was being presented - if you presented information that supported a mortgage of X then you would have been granted it, and that is what was happening.

Also, the fecking mortgages required the consent of the borrower - the banks never threw money at people they offered a service and a range of products, there was no obligation on any customer to execute any loan documentation, they were free to pick and choose which bank they dealt with and what products they availed of.

jmayo

yosser hughes wrote: »

What's going on in this country is gombeenism and it's promoted daily by the likes of David Hall of New Beginnings who seems to have a residency in RTE.
The narrative of" it 's all the banks fault" has been relentless since 2007. Those who cheerled the property bubble are now cheerleading the debt forgiveness/strategic default. Except they are denying that strategic default is going on at all.
this country will remain screwed as long as rising property prices is greeted as good news and a sign of 'recovery' and also as long as supply is restricted by people being allowed live in their houses for free.
That's not to mention the vast vast amount of Buy - to -let investors who are pocketing the rent and not repaying their loans either.
It's an ongoing farce. The country will suffer, remain unsustainable and the taxpayer will pay for it.

there is a huge vested interest group pedalling debt forgiveness morning noon and night in the media.
How many fooking Frontlines have we had now where the audience has been stacked with ones looking for "help" with their mortgages ?

Joe Hart wrote: »

You get one of those every day on that site. That is reality, people suffering serious buyers remorse and they want to foist their problem on us.

Just remember who is running that site.

The_Morrigan wrote: »

This is important...the amount of people who lied on their applications was unbelievable. I know a lot of people who would have taken a loan from the credit union for their deposit because the credit union didn't show up on the credit reports, not disclose that amount in the mortgage application and then come back in a year or two later looking to renegotiate the repayments because they couldn't pay both. The banks could only work off what was being presented - if you presented information that supported a mortgage of X then you would have been granted it, and that is what was happening.

Also, the fecking mortgages required the consent of the borrower - the banks never threw money at people they offered a service and a range of products, there was no obligation on any customer to execute any loan documentation, they were free to pick and choose which bank they dealt with and what products they availed of.

You are being economical with the truth there.
Banks were sending out unsolicited mail to customers offering them 20k in personal loans and some eejits took them up on this.
I have personal experience of going into a now merged building society, no not INBS, and was told by mortgage borker that with my deposit I should have no problem getting mortgages for a few places and that is how I should proceed.
Bank employees and brokers were often incentivised through bonuses on volume of business and the more they lent out the higher were bonuses.

They actually helped people lie.

Now saying all of that, it does not absolve mary or mickie from paying off their debts and people need to take personal responsibility for their fooking actions :mad:

Anynama141

jmayo wrote: »

there is a huge vested interest group pedalling debt forgiveness morning noon and night in the media.

Just on a point of information, I believe that solicitors (and barristers?) can't practice if they are bankrupt. Also solicitors have been up to their necks in building property empires, presumably having seen their clients 'making money' hand over fist during the good times.

It's worth noting that New Beginning and Irish Mortgage Holders Association, two of the main lobbyists for debt forgiveness, are both founded and fronted by lawyers.

hmmm

If someone has a second property and isn't paying the mortgage in full, I cannot understand why that property should not be repossessed immediately. Yet there are 48,000 buy to let loans "in difficulty". 48,000. Property investors. 48,000. And taxpayers are effectively subsidising them by propping up the banks.

yosser hughes

Anynama141 wrote: »

Just on a point of information, I believe that solicitors (and barristers?) can't practice if they are bankrupt. Also solicitors have been up to their necks in building property empires, presumably having seen their clients 'making money' hand over fist during the good times.

It's worth noting that New Beginning and Irish Mortgage Holders Association, two of the main lobbyists for debt forgiveness, are both founded and fronted by lawyers.

David Hall of New beginnings is also a director of several casinos around Dublin. I doubt many of his customers get debt forgiveness at the roulette wheel.
Is he ever asked about his own situation regarding property or indeed how he applies debt forgiveness in his own business? Is he f**ck!
When the person interviewing him is also up to their necks because they bought a rock in Dalkey or a few apartments in the Ritz Carlton.
Good point about solicitors involved in property plays. I know quite a few who got heavily involved in mad schemes. Bogland in the midlands etc.

Duckjob

http://www.rte.ie/news/business/2013/0403/379597-imf-economy-assessment/

....

In its latest review of Ireland's bailout programme, the fund also raises concerns that banks are losing money even before putting cash aside to cover bad loans.

The IMF states that lenders are "only beginning to tackle non-performing loans".

It says repossessions are low at 0.3% of total mortgage arrears in 2012, compared to 3.25% in Britain and the United States.

The IMF suggested a need to strengthen the efficiency of the repossession regime.

It also said that the designation of specialist judges could concentrate expertise for handling a "potentially larger volume of repossession cases in an expedited manner", while maintaining protections for homeowners.

....

I wonder are the Gov. running out of road to kick this can down...

newby.204

Should the banks not be given powers to repossess homes in certain instances, I would have grave concerns with repossessing family homes, however anyone with a second property that is in financial difficulty should definitely have the property repossessed...... it could be offered to the occupants as their mortgage would probably be half or 2/3 of their rent payments!!

Also do we not have an opportunity here to drastically change the Irish property market, what is the obsession with a crippling mortgage for the purposes of "owning" ones home, if allowed to repossess could the banks not create a potential gold mine of rent controlled property?,a massive portfolio that could generate millions over the term of lifetime leases?

Eg a buy to let property with an outstanding mortgage of 125000

If the bank repossessed this property and let it at 500/month for example over 70 years is 420000

With controlled rents, and maintained properties they would almost certainly be profit generating properties

This is a simple example but now multiply 420000x48000 properties!!!!

Anynama141

newby.204 wrote: »

Should the banks not be given powers to repossess homes in certain instances, I would have grave concerns with repossessing family homes

What is so special about 'family homes'? What is your position on renters who can't afford their rents due to unemployment or other financial difficulty?

newby.204

Anynama141 wrote: »

What is so special about 'family homes'? What is your position on renters who can't afford their rents due to unemployment or other financial difficulty?

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent? So where do you house them once they've had their house repossessed? They then become a council housing problem and your taxes are still paying for them!! Now multiply that by every family home in the country who is in arrears, I would give a simple exception that if a family are in arrears for a home they simply cannot afford and could afford a smaller more modest home well then I think a forced repossession/sale/remortgage to a more affordable home would be a solution

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

However that also brings about my point about controlled rent if you bring rents down it makes it more affordable to rent than buy!! More people would be inclined to rent I think if they could lease a house properly!! And not just for 6 months or a year!!

I do not believe simply taking back homes, evicting people and selling them on to cover the costs is the solution even if it is the simplest one!! They are still occupants who need a residence(children could also be involved)!! However I have no such sympathy with buy to let owners who are refusing to pay, it's an investment that didn pay off, like backing a horse or playin the lotto!!

Diarmuid

newby.204 wrote: »

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent?

You missed the point and then presented a false dichotomy.

Example: family with a monthly income of 3000 (say since the bust) paying out on a mortgage of 2500 for a 4 bed. they can't afford the house but they could easily rent a smaller house down the road for 1300.

Ray Palmer

Diarmuid wrote: »

You missed the point and then presented a false dichotomy.

Example: family with a monthly income of 3000 (say since the bust) paying out on a mortgage of 2500 for a 4 bed. they can't afford the house but they could easily rent a smaller house down the road for 1300.

While that sounds fair it is unlikely. The person will still owe the money for the large house in Ireland as it stands.

What is false is the belief that once somebody looses their home they will go straight to the state and the state will then provide for them. It won't happen as the state doesn't have the ability to provide for everybody.

First you will have to qualify to get RA or be allowed put your name down on the waiting list for a council house.

Secondly people have friends and family which will put them up or some kind of arrangement will be made.

Thirdly trying to find a LL who will take RA is difficult as is do you think many are going to jump to provide property for people who have a massive debit and have a record of not being able to pay their bills?

There will be a portion but is it the majority or a small amount. I suspect it will be small.

Ultimately if you can't afford something you have why should you have the state subsidize you? If you play out all the figures maybe it will be better to let them live there but I doubt it. There also isn't much choice IMF have effectively told the state to speed up repossessions so it is happening one way or the other.

Yes people will suffer but that is the reality as it is the situation that people put themselves in. Are all victims or responsible for their own choices? Ultimately it will be a bit of everything but so be it as it is having a bigger impact on everybody else and has to be treated.

The_Morrigan

jmayo wrote: »

......You are being economical with the truth there.
Banks were sending out unsolicited mail to customers offering them 20k in personal loans and some eejits took them up on this.
I have personal experience of going into a now merged building society, no not INBS, and was told by mortgage borker that with my deposit I should have no problem getting mortgages for a few places and that is how I should proceed.
Bank employees and brokers were often incentivised through bonuses on volume of business and the more they lent out the higher were bonuses.

They actually helped people lie.

Now saying all of that, it does not absolve mary or mickie from paying off their debts and people need to take personal responsibility for their fooking actions :mad:

To be fair, I don't think I am.
I am aware of the letters you are talking about, they were product offerings letting customers know that this is what we are offering - the same way service providers cold call you trying to get you to switch to their service.

Remember this is a time that the big UK banks came to Ireland and the likes of AIB & BOI had to stump up their products to try stay in the game. They increased their offerings, tried to retain customers by letting them know if they needed to get a new car based on their banking profile with them they have a 'pre-approval in principle' of X amount and the process would be easy rather than going to Halifax or RBS and having to deal with a longer process. No bank sent out blank cheques to clients and let them run amok, every customer still had to go through the process of signing legal documentation to draw down a loan, it was the customers choice which bank they went with, if any.

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

Ray Palmer

The_Morrigan wrote: »

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

While I don't agree with what was said with regard to banks pushing people to take more money and encouraging them to lie on applications there is the issue of brokers. Many people think brokers are bank employees and don't see the difference. The reality is the brokers are paid a commission and are not exactly known to care past that.

The brokers certainly did let people know the system and how to get more money. They also did let people know how they could buy a second property. That said they didn't put guns to peoples' heads.

The whole model of brokers for financial products needs to be addressed. The UK have just introduced a new system called RDR based on a Dutch model. No more ongoing commission paid for by the customer hidden among the charges. Restrictions on commission and full visibility. You know there are probably brokers getting paid by the banks for mortgages that are in arrears. They can get commissions for the entire lifetime of the mortgage.

Working in a bank doesn't mean you know the full system in place or people's experiences when they went looking for a mortgage. A lot of financially illiterate people can easily be fooled.

The_Morrigan

Ray Palmer wrote: »

While I don't agree with what was said with regard to banks pushing people to take more money and encouraging them to lie on applications there is the issue of brokers. Many people think brokers are bank employees and don't see the difference. The reality is the brokers are paid a commission and are not exactly known to care past that.

The brokers certainly did let people know the system and how to get more money. They also did let people know how they could buy a second property. That said they didn't put guns to peoples' heads.

The whole model of brokers for financial products needs to be addressed. The UK have just introduced a new system called RDR based on a Dutch model. No more ongoing commission paid for by the customer hidden among the charges. Restrictions on commission and full visibility. You know there are probably brokers getting paid by the banks for mortgages that are in arrears. They can get commissions for the entire lifetime of the mortgage.

Working in a bank doesn't mean you know the full system in place or people's experiences when they went looking for a mortgage. A lot of financially illiterate people can easily be fooled.

Ray I completely agree and in my first and second draft of my post (lost both on mobile) I had mentioned that brokers were a different breed and should not be confused with the bank staff in the branch networks.

And I wholeheartedly agree that some people were duped by bad eggs, but that is the same for all professions, it is not exclusive to financial services. At the end of the day, noone was forced into signing a loan agreement and people need to be responsible for their own actions.

I can see this from both sides, from working in the industry before and after the boom and I have a mortgage that is in negative equity, but I took it out and I will continue to pay it and sacrifice nights out, holidays etc to ensure I do everything in my power to keep up with the payments as it is my home and my responsibility.

FutureGuy

Met a guy I used to go to school with on Monday. The same guy who called me an idiot for not buying in 2007.

He's 2 months in arrears but fully blames the banks for his situation.

And I'm the idiot...

seamus

Ray Palmer wrote: »

While that sounds fair it is unlikely. The person will still owe the money for the large house in Ireland as it stands.

What is false is the belief that once somebody looses their home they will go straight to the state and the state will then provide for them. It won't happen as the state doesn't have the ability to provide for everybody.

This. If repossessions were as straightforward as taking your home and letting you walk away and rent somewhere else down the road, mortgage-free, everyone in arrears would jump at the offer.

Hell, I'm managing my mortgage just fine and I'd jump at that offer.

We are however, also culturally and politically very opposed to physical infringements on the family home*, and any legislation which is seen to give 3rd parties more access to take a person's home, would be enough to collapse a government.

As you say, it suits the government at present to have few repossessions. If people started getting thrown out of their family homes, the council housing lists would explode, and local authority costs would increase as they start paying rent on private properties to temporarily house those with nowhere to go.

For the moment, these costs lie as mortgage arrears on the banks' balances and the government are happy to leave them there. And people are happy that no-one is taking their home from them. So everyone's happy. Except that this is an ever-increasing powderkeg which must be dealt with eventually.

*Anyone who responds with the words, "property tax" instantly goes on my ignore list

jmayo

yosser hughes wrote: »

David Hall of New beginnings is also a director of several casinos around Dublin. I doubt many of his customers get debt forgiveness at the roulette wheel.
Is he ever asked about his own situation regarding property or indeed how he applies debt forgiveness in his own business? Is he f**ck!
When the person interviewing him is also up to their necks because they bought a rock in Dalkey or a few apartments in the Ritz Carlton.

You forgot about indulging in expensive court cases.

Anynama141 wrote: »

Just on a point of information, I believe that solicitors (and barristers?) can't practice if they are bankrupt. Also solicitors have been up to their necks in building property empires, presumably having seen their clients 'making money' hand over fist during the good times.

It's worth noting that New Beginning and Irish Mortgage Holders Association, two of the main lobbyists for debt forgiveness, are both founded and fronted by lawyers.

It isn't just solicitors.
I remember a thread, around here I think, about some "poor" pharmacist who wanted a debt writedown because he developed the postoffice in a small rural Clare village adding some retail units and appartments.

There are a huge swath of the so called Irish professional class and middle class e.g doctors, pharmacists, solicitors, accountants, vets, diown to teachers and guards, etc who all climbed aboard the jolly property ladder and the less astute or probably more correctly the less greedy and luckier ones got off in time.

newby.204 wrote: »

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent? So where do you house them once they've had their house repossessed? They then become a council housing problem and your taxes are still paying for them!! Now multiply that by every family home in the country who is in arrears, I would give a simple exception that if a family are in arrears for a home they simply cannot afford and could afford a smaller more modest home well then I think a forced repossession/sale/remortgage to a more affordable home would be a solution

Yes, but I am not paying so that they can have an asset in 20 to 40 years time.

newby.204 wrote: »

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

Of course tenants are of course of lesser importance than "home owners". :rolleyes:
Tenants are fair game for eviction, but mortgage defualters are not. :rolleyes:
Some are more equal than others ehhh ?

newby.204 wrote: »

I do not believe simply taking back homes, evicting people and selling them on to cover the costs is the solution even if it is the simplest one!! They are still occupants who need a residence(children could also be involved)!!

You do know that some tenants have children as well ??

jmayo

The_Morrigan wrote: »

To be fair, I don't think I am.
I am aware of the letters you are talking about, they were product offerings letting customers know that this is what we are offering - the same way service providers cold call you trying to get you to switch to their service.

There is a big bloody difference between a product offering from Eircom, Dell, Tesco, etc and a personal loan of 20k from a bank.

The_Morrigan wrote: »

Remember this is a time that the big UK banks came to Ireland and the likes of AIB & BOI had to stump up their products to try stay in the game.

Ah FFS lets not start blaming the Brits.

Lets shine a light on the Irish banks to see their track record of responsible governance. :rolleyes:

AIB for one has always been a shoddly run, if not bordering on downright fraudalent, organisation.
If we had a decent regulation system in this country half of it's board/directors/executives would have seen a jail cell down the years.
Or maybe we should start forgetting about Nevis funds, stockbroking subsidaries advising clients to buy parent's bank shares, non resident accounts with tax avoidance, ICI, Eugene McErlean, etc.

INBS has been shown to have also been engaged in highly dubious activites including facilitating breeches of company law with other institutions, the ignoring of lending rules of the organisation, etc.

And of course then we have Anglo which I think needs no explanation.

And the others are no shining lights of ethical behaviour either when a light is shone on them.
So please lets not start the sh** about how it was all the fault of the likes of Halifax/BOSI.

The_Morrigan wrote: »

They increased their offerings, tried to retain customers by letting them know if they needed to get a new car based on their banking profile with them they have a 'pre-approval in principle' of X amount and the process would be easy rather than going to Halifax or RBS and having to deal with a longer process. No bank sent out blank cheques to clients and let them run amok, every customer still had to go through the process of signing legal documentation to draw down a loan, it was the customers choice which bank they went with, if any.

FFS at the same time as you claim the banks were trying to retain customers, my customer experience with one major bank was going down the toilet to the point where I had to rely on foreign banks to correct their errors.
And I bet if we did a poll you woukld find the customer experience many got was cr** where branches were being shut, tellers were replaced with machines which half the time did not work.

The_Morrigan wrote: »

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

Would you consider advancement a commission of sorts.
I bet if you did not lend enough you didn't get promotion ?
Hell it worked for richie boy boucher didn't it. :rolleyes:

The industry you worked in, and whose behaviour you are apologising for, has helped sink this country for generations and deserves no quarter.

And no matter if I hate bankers, banks, etc it doesn't mean I absolve anyone that owes them, and by direct conseuqnce of the banks actions, the rest of us money.

The_Morrigan

jmayo at no point in my post did I blame the Brits, I simply mentioned that the reactions of the national banks was to the establishment of much bigger players in the market that they dominated for years without interruption.


I'm quite insulted that you have compared me and my personal experience as a staff member of a retail bank during the time all these mortgages were being taken out by customers to the religious child abuse scandals.

hfallada

RTE are making people believe they're will be debt forgiveness. That if you don't pay your mortgage you'll get x% knocked off your mortgage. They are always comparing ireland to countries not in any shape or form like Ireland eg japan.

RTE need to stop telling what people want to hear and what they need to hear. If you dont pay your mortgage for the next 12 months you may not lose your house today but in 2-3 years

Anynama141

newby.204 wrote: »

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

So if someone isn't paying their rent, they must be kicked out of their home, but if they aren't paying their mortgage, they get to stay there?

Isn't that just a little bit inconsistent?

Ray Palmer

seamus wrote: »

This. If repossessions were as straightforward as taking your home and letting you walk away and rent somewhere else down the road, mortgage-free, everyone in arrears would jump at the offer.

Hell, I'm managing my mortgage just fine and I'd jump at that offer.

We are however, also culturally and politically very opposed to physical infringements on the family home*, and any legislation which is seen to give 3rd parties more access to take a person's home, would be enough to collapse a government.

As you say, it suits the government at present to have few repossessions. If people started getting thrown out of their family homes, the council housing lists would explode, and local authority costs would increase as they start paying rent on private properties to temporarily house those with nowhere to go.

For the moment, these costs lie as mortgage arrears on the banks' balances and the government are happy to leave them there. And people are happy that no-one is taking their home from them. So everyone's happy. Except that this is an ever-increasing powderkeg which must be dealt with eventually.

*Anyone who responds with the words, "property tax" instantly goes on my ignore list

Why should repossessions be straightforward where you can just walk away from the debit you have? You'd do it if you could which pretty much points out to why it can't be done.

You seemed to completely misunderstand me. I don't think that it suits the government to not have repossessions. I outlined why it specifically won't cost the government money to house people. The government haven't done it due to public opinion but have little choice now as the IMF will push them.

Considering the housing list has a 4 year waiting list in many places increasing the waiting list isn't exactly going make much difference is it?

Lots LL don't rent to RA tenants so increase in demand with no increase in price won't increase supply.

Some people will suffer but it certainly won't be everybody who has their house repossessed left in the gutter.

SeventySix

The banks dont need to start the repossessions with family homes, start with the Buy-To-Let crowd. Its less emotive and might shock those Landlords that are currently pocketing rent in to starting to live up to their responsibilites.

Nino Brown

I just saw the OP's chart on Bloomberg this morning. This issue is becoming mainstream news not just in Ireland but worldwide, it will have to be acted upon now, we cant sweep it under the carpet anymore.
I'm so tired of people taking the most extreme situations possible to argue against evictions. People won't be homeless, they can move back in with family if they have to, or rent a cheaper place that they afford. In fact if they foreclosed on every mortgage in the country that was over 1 year in arrears next week, I bet there wouldn't be a single homeless person. And there wont be nearly as many foreclosures as people are saying, because as soon as foreclosures start, the people are taking the piss wont be long about paying up, so the amount of people who are supposedly struggling, will be proven to be a lot less than it appears.

who_ru

Ray Palmer wrote: »

You seemed to completely misunderstand me. I don't think that it suits the government to not have repossessions. I outlined why it specifically won't cost the government money to house people. The government haven't done it due to public opinion but have little choice now as the IMF will push them.

if the Govt can fudge the issue until the end of the year, and lets face it they have done so so far, maybe with the expectation that the bailout will be exited in 2014, the govt may not bother pushing repos too hard.

but of course the people renting enjoy no such protection.

Ray Palmer

who_ru wrote: »

if the Govt can fudge the issue until the end of the year, and lets face it they have done so so far, maybe with the expectation that the bailout will be exited in 2014, the govt may not bother pushing repos too hard.

but of course the people renting enjoy no such protection.

That doesn't make any sense. There is no way we will be out of the bailout in 2014 and the IMF have a say regardless. The laws have to change you do get that it isn't the government actually stopping the banks directly?

People renting can stop paying rent and pretty much stay there without any penalty for a long time. You do understand some of the buy to let people are in trouble precisely because of such people?

Really strange post.

hmmm

Ray Palmer wrote: »

That doesn't make any sense. There is no way we will be out of the bailout in 2014 and the IMF have a say regardless.

As we are now able to raise money on the bond markets at reasonable prices, and because payments on the promissory notes have been pushed out to the distant future, it is almost certain that we will not need a second bailout - assuming nothing happens which scares investors.