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.

rtron

Guy:Incognito wrote: »

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.

Of course you should.

anncoates

Guy:Incognito wrote: »

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.

Yeah, it would have been a barrel of laughs to buy a house, have kids and then lose your job and spend the last year or two with the bank chasing you while you try and keep your family together and find work.

I'd love to try it out.

mickydoomsux

Guy:Incognito wrote: »

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.

Pretty much.

Failure is very much an option in Ireland. Just ****e on about your "poor childer" or some such when you Nigh on willingly make a balls of your life and everyone will treat you like a victim of oppression by the evil Establishment.

Guy:Incognito

anncoates wrote: »

Yeah, it would have been a barrel of laughs to buy a house, have kids and then lose your job and spend the last year or two with the bank chasing you while you try and keep your family together and find work.

I'd love to try it out.

Bar the house I have all that. If anything, my own, comfortable house would have made it easier.

anncoates

Guy:Incognito wrote: »

Bar the house I have all that. If anything, my own, comfortable house would have made it easier.

Ironically enough, a lot of the posts on this topic indicate why it is and will continue to be an issue.

Rather than accept the sh1t has happened and try and best resolve this in a macro sense, it seems more preferable just to point fingers and see it in terms of they got stuff and I didn't. Just like repossessions are mostly seen as what they can deliver for people currently complaining that that housing market is dysfunctional (read: I want a house in Howth for 100k).

Precisely the political culture of Ireland: about me, and not wider society.

Quin_Dub

The government should absolutely not pay anybodies mortgage arrears under any circumstances.

They do need to take some actions though..

They need to change the laws so that handing back the keys settles the debt in full - Banks should not be able to chase you for any balance. The house is the security on the loan, if the security they took out doesn't cover their costs, then tough.

However , if you do hand back the keys you probably should be excluded from getting a mortgage for a period of time (5 yrs maybe?)

In the mean-time they need to find a way of getting the banks to engage with people more in terms of deals on debts - Not talking about write-downs per se , but more about renegotiated payment terms etc.

draiochtanois

This post has been deleted.

anncoates

Quin_Dub wrote: »

The government should absolutely not pay anybodies mortgage arrears under any circumstances.

They do need to take some actions though..

They need to change the laws so that handing back the keys settles the debt in full - Banks should not be able to chase you for any balance. The house is the security on the loan, if the security they took out doesn't cover their costs, then tough.

But handing back the keys is essentially a form of debt relief that will be shouldered by the lender if the house is worth less than the loan taken out for it.

Guy:Incognito

anncoates wrote: »

Precisely the political culture of Ireland: about me, and not wider society.

Whats the benefit to wider society to show people that if they stop paying for things there are no consequences? What happens in the next recession, more free houses?

At what point do the benefits of paying in to society get overtaken by the negatives? It gets to a point where having a job is pointless.

jimgoose

draiochtanois wrote: »

This post has been deleted.

I think all the Standard Variable folk should all assemble on one side of the Shannon, and all the Tracker people on the other, all armed with pickaxe-handles. Then they'd take an almighty run at each other and straighten this the fcuk out once and for all.


<Harrumph> No, I don't really think that. I think the most venerable and educated actuaries at the various financial institutions got that one wrong when they dreamed it up. They shot themselves in both feet, they and they alone. :pac:

bluesteel

Quin_Dub wrote: »

The government should absolutely not pay anybodies mortgage arrears under any circumstances.

They do need to take some actions though..

They need to change the laws so that handing back the keys settles the debt in full - Banks should not be able to chase you for any balance. The house is the security on the loan, if the security they took out doesn't cover their costs, then tough.

However , if you do hand back the keys you probably should be excluded from getting a mortgage for a period of time (5 yrs maybe?)

In the mean-time they need to find a way of getting the banks to engage with people more in terms of deals on debts - Not talking about write-downs per se , but more about renegotiated payment terms etc.

So anyone in Negative Equity should just walk away? Even if you have other assets?

If the remaining debt is unsustainable then fair enough, but otherwise it's a one way bet.

People keep saying that in the US you can just hand back the gaff and walk away, only a small number of States are "non-Recourse". And it's harder to get a mortgage in those states for that reason

Guy:Incognito

Quin_Dub wrote: »

They need to change the laws so that handing back the keys settles the debt in full - Banks should not be able to chase you for any balance. The house is the security on the loan, if the security they took out doesn't cover their costs, then tough.
.

So every time the arse falls out of the market, a heap of people just walk away ?If I bought a medium sized 3 bed house in 2007 for €350k that dropped in value to €150k in 2010 I just walk away,wait a couple of years while renting then buy another one in 2013 for €200k. Seems like a win win situation for the buyer. Where the risk?
Should the bank be able to kick you out of their house (remember , you don't own it till you pay for it) if the value skyrockets and they fancy making more money out of it?

anncoates

Guy:Incognito wrote: »

Whats the benefit to wider society to show people that if they stop paying for things there are no consequences? .

The problem with Ireland is we think we're the firs country in the history of the world to have a property crash and mortgage defaults.

It's happened now. What do we do about it in a way that is of the least cost to the state and beneficial to the economy?

Even the first option in the poll abut renting like the rest of us. If you have, say a 100k shortfall in the mortgage value of your house and you are forced to sell it or foreclose it, you have to service that debt and pay rent so you can't rent like the 'rest of us'.

So while the sackcloth and ashes part of things is all right and correct for AH, what do you do about that without costing the state in other ways?

KomradeBishop

GalwayMagpie wrote: »

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

http://irishmoralhazardorganisation.com/

No information about the identity of the creators of that site - private domain registration as well (yet they went people to put their name up on a petition); looks suspiciously look an astroturfing campaign.

Quin_Dub

anncoates wrote: »

But handing back the keys is essentially a form of debt relief that will be shouldered by the lender if the house is worth less than the loan taken out for it.

Correct - Shouldered by the bank as it should be - They loaned the money and took the deeds to the house as collateral. The fact that the current valuation doesn't cover their costs should be their loss to take, not the tax payer.

I'd accept people being held responsible for the accrued interest , but the capital amount should be cleared by handing back the keys..

hopgog

jimgoose wrote: »

I think all the Standard Variable folk should all assemble on one side of the Shannon, and all the Tracker people on the other, all armed with pickaxe-handles. Then they'd take an almighty run at each other and straighten this the fcuk out once and for all.


<Harrumph> No, I don't really think that. I think the most venerable and educated actuaries at the various financial institutions got that one wrong when they dreamed it up. They shot themselves in both feet, they and they alone. :pac:

Why did anyone take out a svr after 2009, it's odd they are complaining about something they took out after the crash, I suspect anyone getting a mortage after 08 went in with eyes wide open.

SVR was the cost of getting super discounted homes.

bluesteel

KomradeBishop wrote: »

No information about the identity of the creators of that site - private domain registration as well looks suspiciously look an astroturfing campaign.

what the banks are behind it? :rolleyes:

or maybe the person doesn't want bully boys from the Land League wrecking his gaff and protesting on his street

https://www.facebook.com/thelandleague/posts/1512894152320312

Receivers visited by The Land League this morning.
The Home of George Maloney, In Foxrock. Lets let all the Partners in this company know we will no longer allow them to profit from the misery of the Irish people.

K-tec security thugs protecting the home of the receiver in Foxrock this morning. Everything we do makes there job harder and less profitable. They will soon get the message.

TheDoc

Also don't like how politicians and people spin the "turfing a family out on the street" or use it as some sort of moral get out of jail free card.

Where is the sympathy for my family with no home ownership prospects, paying through the nose in the rental market every month? I'm absolutely blessed I'm a great tennant and my landlord is a top bloke, or I would have suffered a rent hike like most of my area, and put me in real trouble.

As it is many areas have spiked there rents to not only grab the extra few hundred from the housing crisis in play, but also to price out social welfare/ rent suppliment receivers. It's such a mess at the moment with no real sign of change or improvement.

Quin_Dub

bluesteel wrote: »

So anyone in Negative Equity should just walk away? Even if you have other assets?

If the remaining debt is unsustainable then fair enough, but otherwise it's a one way bet.

People keep saying that in the US you can just hand back the gaff and walk away, only a small number of States are "non-Recourse". And it's harder to get a mortgage in those states for that reason

Guy:Incognito wrote: »

So every time the arse falls out of the market, a heap of people just walk away ?If I bought a medium sized 3 bed house in 2007 for €350k that dropped in value to €150k in 2010 I just walk away,wait a couple of years while renting then buy another one in 2013 for €200k. Seems like a win win situation for the buyer. Where the risk?
Should the bank be able to kick you out of their house (remember , you don't own it till you pay for it) if the value skyrockets and they fancy making more money out of it?

Of course not - This shouldn't be something that anyone should be able to do on a whim.. It should be an option of last resort when all other avenues have been exhausted , including the sale of other assets etc.. It most certainly should not be a free-for-all..

And , You are correct , Non-recourse states in the US have much more stringent mortgage processes because of the increased risk to the banks with this scenario - I don't see this as a bad thing at all.

Do you think if we had Non-Recourse mortgages in Ireland that we'd have had half the problems we have now??

Somehow I doubts banks would have been giving people mortgages based on future earnings and bonuses etc. etc. as they did here..

jimgoose

Quin_Dub wrote: »

...Somehow I doubts banks would have been giving people mortgages based on future earnings and bonuses etc. etc. as they did here..

Would they buggery, like! Loan-to-value ratios of around 50-60% are more the norm in the non-recourse states in the US.