Government to pay mortgage arrears *Mod Note in Opening Post*

on_my_oe

http://www.independent.ie/irish-news/politics/taxpayers-to-bail-out-those-in-mortgage-arrears-plan-31135507.html

The government is going to pay the mortgage arrears to ensure families remain in their homes; banks will restructure the mortgage and they'll receive a 'top up' payment using taxpayers money.

Every time I think Ireland can't find a new way to screw over the decent and hardworking, I'm surprised and disappointed. I lived in an apartment where the landlord didn't pay the mortgage for over five years, pocketing the rent money. We then lost our security deposit in the repossession process.
We now own and pay a higher variable rate because of those on tracker mortgages and we don't benefit from any mortgage interest rebates. We struggle hard to pay our mortgage, so why the <beep> should I now pay someone else's too?

If you can't restructure your mortgage and its unsustainable, you lose your home and you rent.

Mod Notes:

Folks, just a couple of things:
* can you please keep in mind this is A&P, not the politics or the economics forum, try stay within the remit of this forum.
* please don't personalise your posts towards others, this is a general discussion so posters own situations shouldn't be jumped on and judged.
* can you curtail the profanities please, there is absolutely no need to use foul language to express yourself in this forum.
*attack the post, not the poster.

Don't breach the charter, if in doubt re-read it.

snubbleste

I don't feel well.

Kaizersoze81

If this happens I'm leaving this country for good. Fcuking joke. Another slap in the face to people who worked hard and did the right thing struggling to pay their mortgage.
Can't afford your mortgage? Move someplace you can then.

LeinsterDub

Had to check the publication date wasn't April 1st. Joke idea

How much is that upcoming election in the window. The one fg/lab think is for sale?

soccercrew

Isn't this just a way of helping struggling families. You people always go on about the government not helping families but when they do, you go on another rant- but what about me! Listen, were all in a fcuked up situation, live in a capitalist society so you just have to take the rough with the smooth. I bet you people never ranted when you got your wee slice of the cake!

zagmund

What I don't get is the continued rattling on the radio and in the newspapers about "ow-er cultural aversion to evictions" and how this colours all sorts of political & economic decisions.

I don't know about the rest of you, but I have my own cultural aversion to paying way over the odds because the banks . . . well, just because they can charge what they want to the people who *do* pay to make up for the losses accruing from all the others who aren't paying.

As an aside, I thought we cleared out all the losses into NAMA or something so that the banks which remained would be starting off with "good" debts. You know the whole good bank/bad bank thing.

z

on_my_oe

soccercrew wrote: »

Isn't this just a way of helping struggling families. You people always go on about the government not helping families but when they do, you go on another rant- but what about me! Listen, were all in a fcuked up situation, live in a capitalist society so you just have to take the rough with the smooth. I bet you people never ranted when you got your wee slice of the cake!

We never got a slice of cake, we just keep working to pay for all the ingredients.

It's called personal responsibility. If you can't afford it, you don't get it. If you can't afford home ownership, you don't get to own a house, you rent. Why would a family earning average wage saving for a deposit bother? They might as well throw in the towel

Kaizersoze81

At least I know what to do during the next boom. Borrow as much as I can buy the biggest house I can then don't pay the mortgage when things go bad. Sure the tax payer will bail me out. Joke of a country.

Kidchameleon

Kaizersoze81 wrote: »

If this happens I'm leaving this country for good. Fcuking joke. Another slap in the face to people who worked hard and did the right thing struggling to pay their mortgage.
Can't afford your mortgage? Move someplace you can then.

So you'll leave the country if an ordinary Joe Soap gets help but you never had a problem when millionaire bankers & developers got their debts written off?

soccercrew

on_my_oe wrote: »

We never got a slice of cake, we just keep working to pay for all the ingredients.

It's called personal responsibility. If you can't afford it, you don't get it. If you can't afford home ownership, you don't get to own a house, you rent. Why would a family earning average wage saving for a deposit bother? They might as well throw in the towel

O yes you did! You got lower taxes, lower interest rates, better living standards etc.. I could go on but I think you get the jest. Yes you mightn't have gotbwhat others did but your life benefited throughout the years but you are jealous others are getting more.

Villa05

Kaos and anarchy if this is brought in

Eugene Norman

Villa05 wrote: »

Kaos and anarchy if this is brought in

Not at all. Screwing the rental sector is the basis of modern Irish economics.

RecordStraight

Kidchameleon wrote: »

So you'll leave the country if an ordinary Joe Soap gets help but you never had a problem when millionaire bankers & developers got their debts written off?

Well there's a pretty random straw man.

We could be looking at a situation where the people who thought it was too risky to buy back in the bubble - the smart, cautious people - who opted to rent are now going to see their tax money going to the reckless, foolish people who outbid them back in the day. The people who actually drove up the prices to crazy levels.

You couldn't make this sh!t up.

Villa05

Banks are cunning and clever. Push all the reposessions out until a year before an election knowing weak politicians will buckle and submit and transfer more taxpayer's money to parasite banks.

To any politician reading this. Stand up and be counted. Enough is enough.

galljga1

In a statement to the Indo, Brian O'Donnell says he is delighted to be given the opportunity to return to his former home 'Gorse Hill' thanks to the kindness of the Irish taxpayer.

JustTheOne

About time people woke up and stopped blaming the government for the state of the country.

The people who wrecklessly borrowed are just as much to blame as the banks.

FG left to pick up the mess.

Eugene Norman

RecordStraight wrote: »

Well there's a pretty random straw man.

We could be looking at a situation where the people who thought it was too risky to buy back in the bubble - the smart, cautious people - who opted to rent are now going to see their tax money going to the reckless, foolish people who outbid them back in the day. The people who actually drove up the prices to crazy levels.

You couldn't make this sh!t up.

Sentiment in the journal comment section agrees with you. This will keep non-repossessed house holders happy at the expense of taxpayers, people who have been paying their mortgages, and specifically the rental sector.

Furthermore why are the arrears figures not changing if the economy is improving. Will we have people paying mortgages on small houses and the imprudent -- regardless of a change of circumstances -- keeping mortgages in 4 bedroomed houses in SCD?

ziggyman17

want about the people who are repaying their mortgage, but are living on the breadline?? will they get a help out?? no chance.. I'd say their is a lot of people deliberately not meeting their repayments..........

RecordStraight

ziggyman17 wrote: »

want about the people who are repaying their mortgage, but are living on the breadline?? will they get a help out?? no chance.. I'd say their is a lot of people deliberately not meeting their repayments..........

If there is any way that you are struggling, or even making some compromises on your lifestyle, to meet your mortgage, you'd be mad to keep paying it under this proposal. Stop paying, get a sweeter deal from the bank, and spend the extra money on holidays and whatnot, courtesy of the tax payer.

A clever way to increase the number of strategic defaulters. I've never received a satisfactory explanation as to why our rate of default was so much worse than Spain and even Greece.

Amirani

Villa05 wrote: »

Banks are cunning and clever. Push all the reposessions out until a year before an election knowing weak politicians will buckle and submit and transfer more taxpayer's money to parasite banks.

Or maybe it's something got to do with the fact that property prices have risen to a level that make the economic value of house repossessions viable? Seems more sensible than your reasoning.

Amirani

zagmund wrote: »

As an aside, I thought we cleared out all the losses into NAMA or something so that the banks which remained would be starting off with "good" debts. You know the whole good bank/bad bank thing.

z

NAMA has dealt mostly with commercial real-estate and large scale residential developments. They haven't been buying individual residential mortgages to any great degree.

Amirani

soccercrew wrote: »

Listen, were all in a fcuked up situation, live in a capitalist society so you just have to take the rough with the smooth. I bet you people never ranted when you got your wee slice of the cake!

I think the point is that this is in no way capitalist, despite as you say, we live in a predominantly capitalist society. Removing moral hazard and unjustly interfering with a perfectly normal market mechanism (foreclosure) doesn't really make sense in such a system.

Villa05

Diego Simeone wrote:

Of maybe it's something got to do with the fact that property prices have risen to a level that make the economic value of house repossessions viable? Seems more sensible than your reasoning.

We do have recordings of how the banks think. Skin in the game and all that. My theory is just as much valid as yours.

It's about power, positioning and using it to maximum advantage and to hell with the consquences.

Recovery in property prices only help banks in Dublin and a few other select markets around the country.
An election on the other hand is nationwide.

Mr. teddywinkles

Kidchameleon wrote: »

So you'll leave the country if an ordinary Joe Soap gets help but you never had a problem when millionaire bankers & developers got their debts written off?

Why would anyone working hard paying their mortgage bother anymore and say fook this ill say I cant pay. The taxpayer will pay for my home
This is just loony.

Atlantic Dawn

People bought houses at prices they knew in their own head were not affordable yet they signed up once they could get access to money, this pushed the prices up and up so people with any sense held off buying. Now that they are in trouble they want their mortgage covered and the government want to maintain the house prices leaving those who had sense to not only pick up the tab for the mistakes of others but they are prevented from buying a house because the prices have been artifically controlled by keeping the basket case arrears houses off the market.

dissed doc

on_my_oe wrote: »

We now own and pay a higher variable rate because of those on tracker mortgages and we don't benefit from any mortgage interest rebates.

you pay a higher rate than a lower rate because that was what you agreed to at the time of signing. The risk that a tracker goes to 10% is still there. I assume you will be campaiging for variable rate holders to subsidise trackers who struggle if they have to pay double what your mortgage is.

If you don't like the term of the loan, don't borrow. You do not have an entitlement to move backwards and forwards through time to compare your situation with someone else and decide hypothetically that you were hard done by. You are not subsidising anyone.

I also paid 10 euro for a burger once and the person after me paid 8. I feel he should give me a euro to compensate me?

RecordStraight

dissed doc wrote: »

you pay a higher rate than a lower rate because that was what you agreed to at the time of signing. The risk that a tracker goes to 10% is still there. I assume you will be campaiging for variable rate holders to subsidise trackers who struggle if they have to pay double what your mortgage is.

Agreed.

I think the notion that variable rates are so high because trackers are so low is a myth. The reason variable rates (the only rates available now) are so high is because banks have to factor in that if you don't bother paying back your mortgage, the chances of actually repossessing your house are tiny. So it's unsecured lending.

No security means that rates have to be much higher to compensate for risk. Another way that everybody is being screwed over to keep people in property they cannot afford.

on_my_oe

I looked at the price, the interest rates and agreed to the terms. That included paying my mortgage repayment in exchange for (eventually) owning my home outright.

Those in arrears did the same, and by that argument they don't want to pay the price they don't get to keep the goods.

bjork

This is the craziest thing I have heard in a long time. We are paying half of them already through social welfare.

Under the proposal, the Government would offer ongoing State support to homeowners who cannot afford to repay their debts in order to allow them to retain ownership of their properties.
Banks would have to agree to restructure the mortgage. In return they would receive a State top-up repayment.

And everyone else gets screwed

bjork

ziggyman17 wrote: »

want about the people who are repaying their mortgage, but are living on the breadline?? will they get a help out?? no chance.. I'd say their is a lot of people deliberately not meeting their repayments..........

Perhaps they need to stop paying and jump on this gravy train?

Eugene Norman

RecordStraight wrote: »

Agreed.

I think the notion that variable rates are so high because trackers are so low is a myth. The reason variable rates (the only rates available now) are so high is because banks have to factor in that if you don't bother paying back your mortgage, the chances of actually repossessing your house are tiny. So it's unsecured lending.

No security means that rates have to be much higher to compensate for risk. Another way that everybody is being screwed over to keep people in property they cannot afford.

Your second point is very good. The CB head said trackers were breaking even but what was causing the banks to not be in a position to lower rates was arrears.

It's not either or. Most people who bought in the boom got tracker mortgages. Most are paying it back. Some people are not. Given that the cost of servicing was reduced anyway and that the banks countenanced interest only repayments I think there are a lot of strategic defaulters.

Mongfinder General

bjork wrote: »

Perhaps they need to stop paying and jump on this gravy train?

BINGO!

Dwalsh58

on_my_oe wrote:

If you can't restructure your mortgage and its unsustainable, you lose your home and you rent.

on_my_oe wrote:

Every time I think Ireland can't find a new way to screw over the decent and hardworking, I'm surprised and disappointed. I lived in an apartment where the landlord didn't pay the mortgage for over five years, pocketing the rent money. We then lost our security deposit in the repossession process. We now own and pay a higher variable rate because of those on tracker mortgages and we don't benefit from any mortgage interest rebates. We struggle hard to pay our mortgage, so why the should I now pay someone else's too?

on_my_oe wrote:

If you can't restructure your mortgage and its unsustainable, you lose your home and you rent.

Nice to have the tracker mortgages people to blame for the high variable rate, I take it you couldn't get one.
What happens when the rent is higher than the mortgage that couldn't be paid in the first place ? Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.
And I have always paid my mortgage and have no arrears but don't begrudge people who are in difficulty being helped.
What's your answer to the problem.

Eugene Norman

Dwalsh58 wrote: »

Nice to have the tracker mortgages people to blame for the high variable rate, I take it you couldn't get one.
What happens when the rent is higher than the mortgage that couldn't be paid in the first place ? Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.
And I have always paid my mortgage and have no arrears but don't begrudge people who are in difficulty being helped.
What's your answer to the problem.

Kick strategic defaulters out. Do not subsidise house owners so they can profit at the expense of renters by giving them a council bailout and then let their house appreciate keeping renters out of the market.

If you have paid your mortgage then you should not welcome the fact that you didn't have to.

on_my_oe

Actions have consequences - if you don't pay for something, you don't get it for free.

And actually I did have a mortgage, just not in Ireland and I paid it back (at higher rates than here).

My answer is to cut your cloth to your bank balance. What about all those who had to rent? Should they get an equal amount handed to them by the government? My landlord got over €60,000 tax free because he didn't pay the mortgage and he didn't declare he was a landlord. He just pocketed the cash.

RecordStraight

Dwalsh58 wrote: »

Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.

How about renters who stop paying? Doesn't it make sense to keep them in their homes too?

And why do you think there would not be enough property to house people? Are the repossessed houses going to be knocked down? Are there not tens of thousands of empty properties already in the country?

Thoie

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up. While there may be some of them with plenty of money who just can't be arsed paying, the likelihood is that the majority can't pay. Yes, they were stupid and reckless and borrowed beyond their means, and yes, you'd like to travel back in time and give them a smack, but we are where we are.

If that majority can't pay their mortgage, they're probably not going to be able to pay much for rent either, and would essentially be looking to the State for housing, one way or another.

I still object to the fact that they'll get a "free" house out of all of this when I keep doing my best. I'm stuck in the negative equity trap - would love to move elsewhere, but have no interest in becoming an accidental landlord, and can't afford to move otherwise.

So how about the government, instead of giving the individuals a "top-up", just takes over their mortgage completely, and their house is now a council house that they can stay living in, paying rent to the council at standard council house rates for the area. However, if they move out, the council keeps the house, and can use it to house other people in need of social housing. The original "owners" come out with a clean slate, but no equity. They can move on to another rented premises elsewhere, or they can start saving from scratch to buy somewhere else.

This would also help with the social inclusion we hear so much about - social housing would be spread across locations, rather than densely packed into small areas.

What pitfalls am I missing?

bjork

Thoie wrote: »

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up. While there may be some of them with plenty of money who just can't be arsed paying, the likelihood is that the majority can't pay. Yes, they were stupid and reckless and borrowed beyond their means, and yes, you'd like to travel back in time and give them a smack, but we are where we are.

If that majority can't pay their mortgage, they're probably not going to be able to pay much for rent either, and would essentially be looking to the State for housing, one way or another.

I still object to the fact that they'll get a "free" house out of all of this when I keep doing my best. I'm stuck in the negative equity trap - would love to move elsewhere, but have no interest in becoming an accidental landlord, and can't afford to move otherwise.

So how about the government, instead of giving the individuals a "top-up", just takes over their mortgage completely, and their house is now a council house that they can stay living in, paying rent to the council at standard council house rates for the area. However, if they move out, the council keeps the house, and can use it to house other people in need of social housing. The original "owners" come out with a clean slate, but no equity. They can move on to another rented premises elsewhere, or they can start saving from scratch to buy somewhere else.

This would also help with the social inclusion we hear so much about - social housing would be spread across locations, rather than densely packed into small areas.

What pitfalls am I missing?

How about not giving them a free house? How about giving the state ownership of the house. Why should they get to keep ownership?

on_my_oe

Now that's something I could go along with, with some exceptions
1) higher valued properties, where funds would be better spent acquiring two lower cost properties instead of one
2) properties with more space than required eg couple and one child in a 4 bedroom house
3) properties in negative equity are excluded - straight out 'vacant and sell up' policy

There would need to be a maximum tenancy period (5?10? years)

RecordStraight

Thoie wrote: »

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up.

People seem to keep missing the point: houses are not going to disappear. What will happen is that people who currently rent will be in a position to buy - freeing up rentals. And those who are currently sitting in nice houses and not paying their mortgage would be repossessed, so they would move into the rental properties.

No property is going to disappear. And there are still tens of thousands of empties out there all over the country.

(except now of course the government wants to take the tax money of renters who are priced out of the market and give it to 'owners' who are not paying their way)

Thoie

bjork wrote: »

How about not giving them a free house? How about giving the state ownership of the house. Why should they get to keep ownership?

That's exactly what I was saying. The state keeps the house (taking over the mortgage), and the current occupants stay there as tenants, paying the normal social housing means tested rent. When/if the tenant leaves, the state still owns the house.

RecordStraight

Thoie wrote: »

That's exactly what I was saying. The state keeps the house (taking over the mortgage), and the current occupants stay there as tenants, paying the normal social housing means tested rent. When/if the tenant leaves, the state still owns the house.

And if they owe hundreds of thousands more than the house is worth, the taxpayer pays that?

on_my_oe

At that stage the occupiers move out into the rental market, the bank sells and the write off occurs.

bjork

RecordStraight wrote: »

And if they owe hundreds of thousands more than the house is worth, the taxpayer pays that?

No, they ownership of the loans stay with the person who took them out

Riverireland

This suggestion is rediculous. As a tax payer I'm all for building 3 bed semis for homeless people, first time buyers an those trading up/down. No way am I happy to keep people in trophy homes. I reckon many of our politicians have massive negative equity property portfolios which we hear nothing about!

RecordStraight

Riverireland wrote: »

I reckon many of our politicians have massive negative equity property portfolios which we hear nothing about!

Indeed. I think you'll find that the number of TDs with more than one property - some with mini-empires - is astonishingly under-reported, especially as these people have a clear conflict of interest in government. Cheap property is good for Irish people and the Irish economy, but expensive property is good for many of our legislators.

Riverireland

RecordStraight wrote: »

Indeed. I think you'll find that the number of TDs with more than one property - some with mini-empires - is astonishingly under-reported, especially as these people have a clear conflict of interest in government. Cheap property is good for Irish people and the Irish economy, but expensive property is good for many of our legislators.

I suppose if the media are not prepared to bring out this information then the only thing to do is ask the on the doorsteps, shouldn't be long now.

_Kaiser_

If this goes through, the Irish obsession with property ownership has reached farcical levels!

As I've said before here, I got the offers of (almost) "free" money and mortgages every fortnight in the Good Times too but I restrained myself to a small car loan that come rain, hail or shine I always paid as agreed.
When I was made redundant in late 2009 my first call was to the bank to restructure the payments - not fun but it had to be done, and they still got something. I was raised that you pay your bills first so that's what I did.

Now several years and changed personal circumstances later as a single guy I find myself priced out of the property market entirely (well unless I want to live in the middle of nowhere away from any job prospects - I work in IT), shafted for tax with no return, and Enda and Co are proposing to use my money to pay for those who took on mortgages they couldn't/can't afford?? - and all so they can buy the next election!!

This country is a joke!

Renegade Mechanic

They need to remove the whole thing about still having to pay your mortgage if youve been kicked out of your house. I have no problem with something being taken off you if you can't afford to pay for it, but I do have a problem with you still having to pay for a house you can't live in.

Mortgage a house in '07 for 300k

Lose it in '10 through eviction and youve only paid off 50k.

Bank only manages to sell it for 130k

You will still be dragged through the courts for the remaining 120k while the new family lives in your families house for a fraction of the cost.

I think it's high time people started getting angry at the people and mechanisms that allow this shafting. By all means lose everything you can't cough up for, and be blacklisted from ever loaning again but that should be the end of it.

Riverireland

_Kaiser_ wrote: »

If this goes through, the Irish obsession with property ownership has reached farcical levels!

As I've said before here, I got the offers of (almost) "free" money and mortgages every fortnight in the Good Times too but I restrained myself to a small car loan that come rain, hail or shine I always paid as agreed.
When I was made redundant in late 2009 my first call was to the bank to restructure the payments - not fun but it had to be done, and they still got something. I was raised that you pay your bills first so that's what I did.

Now several years and changed personal circumstances later as a single guy I find myself priced out of the property market entirely (well unless I want to live in the middle of nowhere away from any job prospects - I work in IT), shafted for tax with no return, and Enda and Co are proposing to used my money to pay for those who took on mortgages they couldn't/can't afford??

This country is a joke!

I think it is important that where ever possible people do own their own homes or have council properties as the other Solution. You can't rely on private landlords for a home for life, they can sell up at any time, very insecure imo.

cursai

I'm assuming this is just a proposal. This will surely never get through the Dail. It is ridiculous. People all over the country would just quit their jobs the next day.