Should people who can't pay their mortgage get Government help?

bluesteel

Do you think people who cannot pay thier mortgage should have it paid by the Government so they don't have to sell and go on the housing list?

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

A government plan to ease the mortgage crisis by using taxpayers' money to bail out those in mortgage arrears has sparked a furious backlash.

"The State has to be conscious of the many thousands of families who are meeting their mortgage repayments through great sacrifice. Any scheme providing direct support would have to be very carefully constructed," Mr McGrath told the Sunday Independent.

http://www.irishtimes.com/news/ireland/irish-news/mortgage-arrears-measures-to-reduce-risk-of-eviction-1.2170740

However, it is also understood the Government is considering a separate scheme that would allow borrowers to retain ownership of their properties but offer them ongoing State support to help them pay their mortgages.

valoren

There is no Irish word for Foreclosure. I looked it up.

YOU'RE HOME IS AT RISK IF YOU DO NOT KEEP UP WITH REPAYMENTS.

Those words are now meaningless. All that small print. All the dealing with solicitors and estate agents and stumping up incredible fees and all for nothing.

TheDoc

Personally my feelings would be that they should sell up and seek alternative housing.

State subsidising mortgage arrears, in other words, me subsidizing people who made bad financial decisions is simply not on. My property ownership was struck away overnight with the new Central Bank regulations. There is another bubble in propoerty in Dublin, with prices sky rocketing for mediocre housing.

I'm all for people organising things like interest only payments and split mortgages and working with their bank in order to try resolve the situation, but the state should not intervene with funding.

If someone can't keep up with their repayments, they should forfeit the house, have the debt written off, and that house be put to market. That will increase supply and settle the pricing, and home ownership can become a reality again for my age bracket.

I'd genuinely flip my **** if this came to pass. New regulations put me outside the home ownership bracket, but I'm not to subsidise people who can't afford their home? **** that.

Dog of Tears

bluesteel wrote: »

Do you think people who cannot pay thier mortgage should have it paid by the Government so they don't have to sell and go on the housing list?

Of course.

Nobody should have to pay for anything. The State should provide it all using funds harvested from the money-tree orchards we've cultivated in Leitrim.

The real question is why aren't they doing this already?
Because they want to keep all the magic-money to themselves, that's why.
I can't wait until Paul Murphy becomes Taoiseach and solves all our problems.

jimgoose

It would be rather better if the various financial institutions who participated in this ridiculous game with great gusto back in the day were forced to take their lumps, as happens in other more civilised jurisdictions.

Maguined

jimgoose wrote: »

It would be rather better if the various financial institutions who participated in this ridiculous game with great gusto back in the day were forced to take their lumps, as happens in other more civilised jurisdictions.

What exactly do you mean by take their lumps? If someone is not paying back their mortage you want the banks to do nothing and let them keep a house they are not paying for?

jimgoose

Maguined wrote: »

What exactly do you mean by take their lumps? If someone is not paying back their mortage you want the banks to do nothing and let them keep a house they are not paying for?

By "take their lumps" I mean repossess the house and write the whole thing off as a bad job, like they do in the USA. As opposed to continuing to pursue the customer for the outstanding mortgage amount.

KomradeBishop

Bad poll options, which are obviously loaded to skew the results.

Problem with this proposed scheme, is it's really light on details - helping people with a mortgage on a second home, or with an excessively expensive/extravagant property, or who are going to efforts to withhold money from mortgage repayments - among more - should not really receive any help.

Genuinely financially distressed homeowners though, struggling to keep up with mortgage repayments for a home they are living in, definitely could do with a hand - and using public debt to help these people out, can reduce private debt levels in a way that helps shift money away from debt repayments and into discretionary income, boosting aggregate demand and helping the economy to grow more.

That said - no matter what way it is organized, this is not a fair way to implement a debt relief policy. However, there is no fair way that is politically possible - so this is still one of the least-worst ways, and should be done.
The only truly fair way would be a 'debt jubilee' as laid out on P15 there, but that is impossible unless done centrally within Europe.

Anyway, IBPC - won't be able to reply past then.

Maguined

jimgoose wrote: »

By "take their lumps" I mean repossess the house and write the whole thing off as a bad job, like they do in the USA. As opposed to continuing to pursue the customer for the outstanding mortgage amount.

Fair enough though they are trying to do this but every time there is an eviction it is portrayed as heartless and negative with protests against it and evictions being blockaded.

They are trying but they are being opposed.

Sleepy

If the family genuinely can't afford the mortgage (rather than just can't afford a high quality of life whilst doing so), if they'd otherwise qualify for social housing and rent supplement and it's cheaper for the government to pay the mortgage (or a percentage of the mortgage), I see no problem with the family staying on in the home and the government taking a share in the ownership of the property which can be bought back by the occupant at it's future market value or clawed back from the sale of the asset in the future..

We have a housing crisis so all avenues need to be explored imo.

I suspect there's quite few in mortgage arrears that could afford to rent suitable accommodation (in the Dublin area at least).

KomradeBishop

You solve a housing crisis by building more houses, not by kicking people out of their houses.

fizzypish

They should never have been given a mortgage of that scope in the first place. The government does have a certain level of responsibility for the bubble so they should lend a certain level of help to those in need.

smash

Should the government pay it? No.
Should the banks help more with better restructuring options? Yes.

catallus

valoren wrote: »

There is no Irish word for Foreclosure. I looked it up.

YOU'RE HOME IS AT RISK IF YOU DO NOT KEEP UP WITH REPAYMENTS.

Those words are now meaningless. All that small print. All the dealing with solicitors and estate agents and stumping up incredible fees and all for nothing.

Tell that to the 500+ homeless families in Dublin alone.

Sleepy wrote: »

...

We have a housing crisis so all avenues need to be explored imo.
...

:pac: Housing crisis? What?!

KomradeBishop

The problem with topics like this is that people don't understand (and don't have an interest in understanding) the complicated economic dynamics behind all of this:
- Excessive Private Debt levels hold back economic recovery, by diverting money from discretionary income and aggregate demand, which could otherwise contribute to growth rates
- Writing down bank debts harms bank balance sheets (unless done centrally at an EU level), putting them in a more precarious position
- Public debt is less of a problem than private debt; excessive levels of the latter, is what holds back economies
- The morals of debt relief are not black and white and can not be viewed in isolation (i.e. viewing it just as 'profligate homeowners' is misguided), they are complicated by the banks and governments role in causing excessive debt levels
- Certain ways of dealing with the mortgage problem are viewed as 'morally superior' but are actually economically inferior, and some of the economically superior options are viewed as 'morally inferior' (and are rejected offhand, despite providing a better outcome for the economy overall)

So this topic is a bit more complicated than people tend to appreciate, yet - despite it not taking that much effort to learn - people don't seem willing to look at or learn the slightly more complicated economic dynamics, behind different policies; people tend to opt for a simplistic/moralistic view of these issue instead.

Streetwalker

Dog of Tears wrote: »

Of course.

Nobody should have to pay for anything. The State should provide it all using funds harvested from the money-tree orchards we've cultivated in Leitrim.

The real question is why aren't they doing this already?
Because they want to keep all the magic-money to themselves, that's why.
I can't wait until Paul Murphy becomes Taoiseach and solves all our problems.

Way to miss the point.

Streetwalker

They should hand back the keys and rent. Good luck getting on the social housing list the waiting time is 9 years plus on parts of Dublin anyway.

JustTheOne

Its all endas fault, he made these people take out these mortgages even though he wasnt in power.

The government can't win ever, people give out about people been kicked out of their homes it's their fault, they suggest helping them their the worst shower.

It wasn't just da bankers who caused the crash, it's people not been able to pay back morgtages too.

Oh the irony.

Sleepy

KomradeBishop wrote: »

You solve a housing crisis by building more houses, not by kicking people out of their houses.

Eh, I'm suggesting that if it's cheaper to keep these people housed where they are that this is what should be done. Not that we kick them out.

My proposal that the government should obtain ownership equating to the percentage of the mortgage they pay would ensure that such a move wouldn't leave them unable to afford to build more social housing.

catallus wrote: »

Tell that to the 500+ homeless families in Dublin alone.

:pac: Housing crisis? What?!

?

anncoates

Too complex to just start in with the Norman Tebbit platitudes.

Are they 'investors' or is it a single family home?

Are they home owners just in short term difficulties or is the scale of debt too large?

Would it be better to restructure the mortgage or partially reduce it if the property is never going to get the price originally paid for it, thus lumbering the lender with more non-functioning loans?

Will the people removed from the property just end up costing the state in other ways: subsidized rent etc?

Unfortunately, most of the opinion on the topic in here will be just be self-motivated: like those wanting to get into property themselves.

As pointed out as well, while people must shoulder some blame for poor financial decisions, the lenders and regulators have to shoulder some blame too.

JustTheOne

anncoates wrote: »

Too complex to just start in with the Norman Tebbit platitudes.

Are they 'investors' or is it a single family home?

Are they home owners just in short term difficulties or is the scale of debt too large?

Would it be better to restructure the mortgage or partially reduce it if the property is never going to get the price originally paid for it, thus lumbering the lender with more non-functioning loans?

Will the people removed from the property just end up costing the state in other ways: subsidized rent etc?

Unfortunately, most of the opinion on the topic in here will be just be self-motivated: like those wanting to get into property themselves.

As pointed out as well, while people must shoulder some blame for poor financial decisions, the lenders and regulators have to shoulder some blame too.

Why?

You take out a loan and can't pay it back how is it anyone else's fault but your own?

Sleepy

I'd have thought it was pretty straightforward tbh anncoates:

If it's not a primary residence: sell it, pay your debts.
If it's your primary residence and you can afford to rent privately (even if that's not in as desirable an area as you'd like): sell it, pay your debts.
If it's your primary residence and you can't afford to rent privately: the social housing stock isn't there to house you so it's a simple matter of doing the sums as to whether it's cheaper for the state to support you in paying your mortgage (whilst taking ownership of a percentage of the property) or to pay a private landlord to house you.

JustTheOne

anncoates wrote: »

Too complex to just start in with the Norman Tebbit platitudes.

Are they 'investors' or is it a single family home?

Are they home owners just in short term difficulties or is the scale of debt too large?

Would it be better to restructure the mortgage or partially reduce it if the property is never going to get the price originally paid for it, thus lumbering the lender with more non-functioning loans?

Will the people removed from the property just end up costing the state in other ways: subsidized rent etc?

Unfortunately, most of the opinion on the topic in here will be just be self-motivated: like those wanting to get into property themselves.

As pointed out as well, while people must shoulder some blame for poor financial decisions, the lenders and regulators have to shoulder some blame too.

Why?

You take out a loan and can't pay it back how is it anyone else's fault but your own?

fizzypish

JustTheOne wrote: »

Why?

You take out a loan and can't pay it back how is it anyone else's fault but your own?

Should never have been given the loan in the first place. The safety procedures in place to prevent people crippling themselves with debt failed miserably and the government has a percentage of that blame.

anncoates

JustTheOne wrote: »

You take out a loan and can't pay it back how is it anyone else's fault but your own?

While I agree to a certain extent, life doesn't work lie that. People - now and historically - will make foolish decisions in a regulatory vacuum.

The thing about taking the moral view about people in the current climate is that it sounds and - to a lot of people - feels good, but it's not going to provide any practical solution to this current situation.

rtron

But we already bailed out the banks why not individuals aswells.In fact why not pay off mortgages of people that are able to pay them as well. One for all and all for one. :-)

mickydoomsux

rtron wrote: »

But we already bailed out the banks why not individuals aswells.In fact why not pay off mortgages of people that are able to pay them as well. One for all and all for one. :-)

"Where's my NAMA? " said literally every bar stool idiot for the past 7 years.

Guy:Incognito

rtron wrote: »

But we already bailed out the banks why not individuals aswells.In fact why not pay off mortgages of people that are able to pay them as well. One for all and all for one. :-)

And what of me that could never afford to get a mortgage and never looked for one? Should I not get a house? I could damn well use a house of my own.

GalwayMagpie

To the people who voted No. Make your voice heard.

http://irishmoralhazardorganisation.com/

The Irish Moral Hazard Organisation (IMHO) are a group of like minded individuals who believe we represent the silent majority who are unwilling to subsidise the vocal minorities mortgages. We have written an open letter on the subject and if you agree with us please sign it using the link on the right or below the letter to bolster our support. Every time the letter is signed an additional copy will be emailed to the Taoiseach and Michael Noonan. Your name and email address will be appended to the email sent but never published online.

Guy:Incognito

The way its turning out , what I should have done years ago is borrow for a house I couldn't afford, not pay the mortgage and just wait it out.

Guy:Incognito

As for the 2nd option in the poll, who decides whats "modest" ? The O'Donnells and their supporters would argue their house is modest.Funny how people love to cry the "one rule for the rich......." line. But then want a different rule for the rich when it suits.