Massive Write Down

Samuel T. Cogley

https://www.irishtimes.com/news/crime-and-law/courts/high-court/court-approves-insolvency-deal-that-halves-woman-s-mortgage-1.3789632


And people wonder why we have such high mortgage rates.


I have to say I completely disagree with this sort of write down, yes prolong the payments and reduce the monthly amount but lopping 160K off a mortgage is just unfair to other mortgage holders.

overkill602

welcome to socialist ireland

Sunrise_Sunset

I wholeheartedly disagree with this too.

E550 per month for college fees, she may go and get a job to put herself through college like the rest of us did.

Pkiernan

I wonder if Revenue will pursue her for the BIK she just received.

JDD

How is it different - from a cost to PTSB point of view - to selling her loan to another entity for €160,000? They're still taking a hit on the money owed.

Sleepy

Where in the hell is she living that a property bought for €343,785 in 2005 is only worth €160,000 in 2019?

I know the recovery has been slower in some areas than others but they didn't even buy at the peak?

Pussyhands

I hate how people can get away with this.

abcabc123123

I don't see the issue here. Legacy cases from the crash like this need be resolved and the amount is unrecoverable. If the woman were to hand the keys back and declare bankruptcy the bank would realise the same loss anyway.

neris

Pkiernan wrote: »

I wonder if Revenue will pursue her for the BIK she just received.

shes a lowly civil servant, now if shed been a broke ex business owner theyd probably be all over her like a rash

Giveaway

So she gets to stay in the house. She was able to raise funds to pay her husbands gambling debts, to hell with the mortgage. Should be declared bankrupt. Should be turfed out of the house too. House should be sold and then gave the write down of debt.
So us suckers who bailed out the banks and pay twice the average interest costs on mortgages as other europeans now have to cover some c u next tuesday's gambling debts(indirectly)

Fann Linn

Houses are overpriced anyway. Just ask any of the 30 year olds on the other thread!

Fann Linn

neris wrote: »

shes a lowly civil servant, now if shed been a broke ex business owner theyd probably be all over her like a rash

Like Sean Quinn.

Giveaway

Her new mortgage is about 180 000 euro. Repayments must be in excess of 1200 euro per month. Unless in dublin city centre could easily afford a 1 or 2 bed flat to rent. But she gets to keep or celtic tiger home. Ita a disgrace

1874

Jesus, didnt think Id be sympathetic to PTSB or a bank, and while I empathise with the alleged?/sated situation with her husband, that debt seems relatively low (If not inexcusable for anyone in a relationship with family bills to pay).

But 900 per month on her wages doesnt seem unrealistic, while I dont think it sensible for young people (or anyone) in college to work too much, that person needs to chip in and get a job, although it may be better they get their education and chip in later as they'll be paying rent somewhere.
I have no doubt this is because she is in a state job, appaling on those wages, I can only conclude she has not been prudent with her wages as she owes nothing on an extortionate loan shark debt (its likely been paid many times over and was not owed by her). What does it have to do with her paying her mortgage, she should have focused on paying that and seen how much was spent on loan shark loans and potentially gone to the Gardai.

So was she living the life of reilly? new cars and holidays? or what because Id love to be on 2900 per month net, so how come she cant make ends meet?
Many people would be paying more than 33% of their income on their mortgage.
Why didnt they just write the debt to its value and give PTSB 50% shared ownership on the sale? this person could make a tidy profit after their insolvency surely?

seamus

Seem reasonable to me. She's on a stable, but relatively fixed income being a civil servant, therefore very little prospect of increasing her earnings into the future. She can afford €900/month in payments, leaving €2k to support herself and her daughter.

If she'd been the one gambling, I'd have less sympathy. But she got shackled to some PoS who racked up a pile of debts and then fncked off.

PTSB should be chasing him for the balance.

The lack of empathy from people in this thread is something else. She should be kicked out of the house because her husband was a scumbag and loaded her with debt? Nice humanity there.

Giveaway

seamus wrote: »

Seem reasonable to me. She's on a stable, but relatively fixed income being a civil servant, therefore very little prospect of increasing her earnings into the future. She can afford €900/month in payments, leaving €2k to support herself and her daughter.

If she'd been the one gambling, I'd have less sympathy. But she got shackled to some PoS who racked up a pile of debts and then fncked off.

PTSB should be chasing him for the balance.

The lack of empathy from people in this thread is something else. She should be kicked out of the house because her husband was a scumbag and loaded her with debt? Nice humanity there.

Why should she get to keep an asset she is not paying for, when she could support herself and nearly adult daughter in rental accomodation. Have some empathy for the people paying their way with familys on less monthly net pay. The courts are usually sympathetic to woman in her situation..ie they dont load them with the outstanding debt after the assets have been sold
Ps the husband needs to be dealt with too.

1874

I may have interpreted that slightly incorrectly, but I still agree with my original opinion, I thought they said she couldnt afford 900, I thought she was paying less. She did sign up for it and I did empathise with her for her husbands alleged failings.
You can be shackled to someone who just wastes money and it might not be on gambling, drink or anything considered serious, but wasting money and getting into uneccesary debt is bordering on criminal in a relationship IMO.


I still think on those wages she could afford 50%, and how much she earns or could earn in the future doesnt seem a reason to write off her debt? some people already pay that, and not for the luxury of paying for their own home.
How much more would her mortgage have been if she was paying full whack.
Mainly it tells me houses are way overpriced for the benefit of keeping the money train going, but will everyone else get this bonus?

marieholmfan

Giveaway wrote: »

Her new mortgage is about 180 000 euro. Repayments must be in excess of 1200 euro per month. Unless in dublin city centre could easily afford a 1 or 2 bed flat to rent. But she gets to keep or celtic tiger home. Ita a disgrace

JOE

Xterminator

nothing socialist about it.

FFS why is it okay for the bank to write down 10's of thousands of mortgages and sell them, but wrong to write down a single one ?

Value was written down to current market value of the house. If the poor woman was turfed out and the house sold that is all they would get anyway. It is simply a practical solution to a sad situation.

marieholmfan

Giveaway wrote: »

Why should she get to keep an asset she is not paying for, when she could support herself and nearly adult daughter in rental accomodation. Have some empathy for the people paying their way with familys on less monthly net pay. The courts are usually sympathetic to woman in her situation..ie they dont load them with the outstanding debt after the assets have been sold
Ps the husband needs to be dealt with too.

What is your point?
I don't see how this woman retaining her home affects other people 'paying their way ' can you clarify?

1874

Giveaway wrote: »

Why should she get to keep an asset she is not paying for, when she could support herself and nearly adult daughter in rental accomodation. Have some empathy for the people paying their way with familys on less monthly net pay. The courts are usually sympathetic to woman in her situation..ie they dont load them with the outstanding debt after the assets have been sold
Ps the husband needs to be dealt with too.

I didnt really think too much about it, but now, Im wondering, what if the situation was reversed or slightly different?
Husband paying, maybe not in a state job, wife disappeared?

I wonder how that would turn out?

seamus

Giveaway wrote: »

Why should she get to keep an asset she is not paying for

Once the debt is brought down to a reasonable level, she will be paying for it. And most likely she has been repaying something. But arrears are really hard to get out of.

What sense does it make for court to turf her and her daughter out so the bank can sell the house for €160,000?

Then the bank see nothing of the rest of the debt and lost money in legal fees on the sale.

Some people get their pound of flesh, but nobody is better off.

The disagreement in this case was not that PTSB wanted to take the house, but that they believed she could afford larger repayments. They failed to prove their case.

1874

marieholmfan wrote: »

What is your point?
I don't see how this woman retaining her home affects other people 'paying their way ' can you clarify?

It likely increases the cost to repay mortgages which affects everyone that doesnt live in a ditch or has their housing funded via social means.
If you own, the cost to repay your mortgage will be greater the more of this that goes on, and if you are a tenant, you will be paying more as you indirectly fund these increases and the owner who pays for a rental property makes less and is incentivised less to invest in it if they pay more, overall it helps push costs up.
And while Im not sympathetic to Banks generally, I think they are ripping us off, this does not help, her situations cost will be shared out.

Widdensushi

They can still follow the husband for the debt and if she sells the house for more than 160k the bank will get the difference, I am not in favour of the judgement but those two factors give some balance to it. The husband could be doing well and getting away free of the debt

1874

seamus wrote: »

Once the debt is brought down to a reasonable level, she will be paying for it. And most likely she has been repaying something. But arrears are really hard to get out of.

What sense does it make for court to turf her and her daughter out so the bank can sell the house for €160,000?

Then the bank see nothing of the rest of the debt and lost money in legal fees on the sale.

Some people get their pound of flesh, but nobody is better off.

The disagreement in this case was not that PTSB wanted to take the house, but that they believed she could afford larger repayments. They failed to prove their case.

By that rationale, we should all have our debt brought down to a reasonable level, which Id actually agree with for everyone, means we wouldnt have to work so hard to pay debt slavery and invest our time and efforts in things we like to do, but this person earns more net than me, has she not been paying down the mortgage or what? has she been financially imprudent and is that to be rewarded? and if so, who pays for it.

Sleepy

Xterminator wrote: »

Value was written down to current market value of the house.

Was it though?

Sorry for making the same point twice but I just can't accept that a property bought for €343,785 in 2005 is only worth €160,000 in 2019. Was the valuation agent a friend of the lady in question I wonder?

The average trend would have the property back at roughly the value it was in 2005 (or even higher), not at 46% of the original price.



So unless the property was affected by pyrite (and isn't covered under the remediation schemes) or the owners have a habit of swinging around sledge-hammers, how in the hell is the asset worth so much less than was paid for it?

Giveaway

seamus wrote: »

Once the debt is brought down to a reasonable level, she will be paying for it. And most likely she has been repaying something. But arrears are really hard to get out of.

What sense does it make for court to turf her and her daughter out so the bank can sell the house for €160,000?

Then the bank see nothing of the rest of the debt and lost money in legal fees on the sale.

Some people get their pound of flesh, but nobody is better off.

The disagreement in this case was not that PTSB wanted to take the house, but that they believed she could afford larger repayments. They failed to prove their case.

I get the debt write down making the mortgage affordable and in selected cases is appropriate, but more than half the principal when she coukd afford to rent. The debt write down should have occured after disposal of the asset. Also the bankruptcy procedure here had been shortened to 3 years.

1874

Giveaway wrote: »

I get the debt write down making the mortgage affordable and in selected cases is appropriate, but more than half the principal when she coukd afford to rent. The debt write down should have occured after disposal of the asset. Also the bankruptcy procedure here had been shortened to 3 years.

It seems she got an apparently preferential treatment?
Im sure a house could have sold and payed off the mortgage, now all it means is she will be renting (not something Id want to be doing myself) and someone else that could get a mortgage would get the place? isnt that already happening to others who are having their homes repossesed off them due to inability/unwillingness to pay? something else must have must be going on here, maybe she has attempted to pay down a a portion of the mortgage, but I dont see how the balance is not reducing unless she didnt pay down a substantial amount for years, and that seems to be the case for people being turfed out of places, they didnt make any effort when they had the means or they didnt have the means, so why is her debt still so high?

Giveaway

Unrelates to this case but surely an american style system where if one defaults on the mortgage, if there is any outstanding debt after sale of the house, the debt is on the lender not the borrower. Would encourage more prudent lending and allow a fresh start for the borrower albeit with a poor credit rating

1874

Giveaway wrote: »

Unrelates to this case but surely an american style system where if one defaults on the mortgage, if there is any outstanding debt after sale of the house, the debt is on the lender not the borrower. Would encourage more prudent lending and allow a fresh start for the borrower albeit with a poor credit rating

I dont think they'd let that fly here, it probably would encourage more people to default.
But it might mean house prices wouldnt have increased as much as the risk of defaulting is greater and it might encourage more realistic lending as you mention, which also might put the brakes on increases.
At this point, I think the brakes are on moderately but way too late, but they should have been cooling off the cost increases in 2003/2004 and then we might have had more stable and sustainable housing costs and less of an effect on the rest of the economy, it wouldnt have prevented the global problems but it may have still helped us nationally if personal debt was lower because of it.

seamus

Giveaway wrote: »

I get the debt write down making the mortgage affordable and in selected cases is appropriate, but more than half the principal when she coukd afford to rent. The debt write down should have occured after disposal of the asset.

That makes no sense. Moving someone out into the rental market just so some numbers can be moved around some spreadsheets?

As a country we're constitutionally bound to place the security of a person's home above the cleanliness of a bank's mortgage account. It's one thing if a person is not paying and refusing to do anything about it. It's another thing entirely if they're willing to pay but have been dragged into the mire by circumstances outside of their control.

There is no actual benefit to anyone, not even to PTSB, in disposing of the property.

Sleepy

seamus wrote: »

There is no actual benefit to anyone, not even to PTSB, in disposing of the property.

There is if the actual market value of the property is closer to the outstanding mortgage balance than the value put forth in the case.

CIARAN_BOYLE

Sleepy wrote: »

There is if the actual market value of the property is closer to the outstanding mortgage balance than the value put forth in the case.

artivle says value was agreed

meeeeh

Sleepy wrote: »

Was it though?

Sorry for making the same point twice but I just can't accept that a property bought for €343,785 in 2005 is only worth €160,000 in 2019. Was the valuation agent a friend of the lady in question I wonder?

The average trend would have the property back at roughly the value it was in 2005 (or even higher), not at 46% of the original price.



So unless the property was affected by pyrite (and isn't covered under the remediation schemes) or the owners have a habit of swinging around sledge-hammers, how in the hell is the asset worth so much less than was paid for it?

So from one graphic showing national averages you can deduct auctioneer lied in court. Cool.

Of course it could be a self build opinion the middle of nowhere that has value only if you actually want to live there.

abcabc123123

'He also said PTSB would do better from the PIA than in a bankruptcy; has protection if the house is sold in the future at a value higher than the agreed market value and can pursue the husband over the mortgage debt.'

Two courts also rejected PTSB's appeal.

Sleepy

CIARAN_BOYLE wrote: »

artivle says value was agreed

When was it agreed? By whom?

meeeeh wrote: »

So from one graphic showing national averages you can deduct auctioneer lied in court. Cool.

Does the auctioneer actually have to appear in court? I wouldn't have thought so...

I'm unaware of any area in the country where property is still at 45% of it's (pre-peak) 2005 value and I can't seem to access the data anywhere on the CSO website.

Franz Von Peppercorn

Sleepy wrote: »

Was it though?

Sorry for making the same point twice but I just can't accept that a property bought for €343,785 in 2005 is only worth €160,000 in 2019. Was the valuation agent a friend of the lady in question I wonder?

The average trend would have the property back at roughly the value it was in 2005 (or even higher), not at 46% of the original price.



So unless the property was affected by pyrite (and isn't covered under the remediation schemes) or the owners have a habit of swinging around sledge-hammers, how in the hell is the asset worth so much less than was paid for it?

The 343,785 is the mortgage she owed at write-down not the price of the house or the original mortgage. Interest and fees accumulate if you stop paying.

meeeeh

Sleepy wrote: »

When was it agreed? By whom?


Does the auctioneer actually have to appear in court? I wouldn't have thought so...

I'm unaware of any area in the country where property is still at 45% of it's (pre-peak) 2005 value and I can't seem to access the data anywhere on the CSO website.

Self build mortgages. A few houses in our neighbourhood went for around 150k (propery tax evaluation was for 125k), our original mortgage was 325k. I haven't got a clue how much people would be prepared to pay for our house because they are all one of houses.

Giveaway

seamus wrote: »

That makes no sense. Moving someone out into the rental market just so some numbers can be moved around some spreadsheets?

As a country we're constitutionally bound to place the security of a person's home above the cleanliness of a bank's mortgage account. It's one thing if a person is not paying and refusing to do anything about it. It's another thing entirely if they're willing to pay but have been dragged into the mire by circumstances outside of their control.

There is no actual benefit to anyone, not even to PTSB, in disposing of the property.

I agree no advantage for the individual cases, but when you establish a culture of defaulting without losing the home, you have many pleading difficulty and a non functional system. If they leave this home some other family will buy it , freeing up supply in the rental sector and so on. When you have non payers holding out in thr home, it forces prices up and rents too as it locks potential buyers into continued renting.
I saw it when house hunting myself

Nermal

seamus wrote: »

That makes no sense. Moving someone out into the rental market just so some numbers can be moved around some spreadsheets?

As a country we're constitutionally bound to place the security of a person's home above the cleanliness of a bank's mortgage account. It's one thing if a person is not paying and refusing to do anything about it. It's another thing entirely if they're willing to pay but have been dragged into the mire by circumstances outside of their control.

There is no actual benefit to anyone, not even to PTSB, in disposing of the property.

Moral hazard. The reason why we have the highest mortgage interest rates in the Eurozone.

Sleepy

Franz Von Peppercorn wrote: »

The 343,785 is the mortgage she owed at write-down not the price of the house or the original mortgage. Interest and fees accumulate if you stop paying.

I somehow missed that in the article despite actually looking for it!

meeeeh wrote: »

Self build mortgages. A few houses in our neighbourhood went for around 150k (propery tax evaluation was for 125k), our original mortgage was 325k. I haven't got a clue how much people would be prepared to pay for our house because they are all one of houses.

If that was the case, I'd have little sympathy for the bank tbh. Lending someone more than the end value of a self-build is pretty much the definition of reckless lending.

Giveaway

Nermal wrote: »

Moral hazard. The reason why we have the highest mortgage interest rates in the Eurozone.

No moral hazard in ireland

seamus

Nermal wrote: »

Moral hazard. The reason why we have the highest mortgage interest rates in the Eurozone.

I'd argue that the moral hazard in Ireland is the fact that banks could hand out mortgages of any size without any real risk that they might lose part of it. A mortgage debt, no matter how large and no matter the value of the underlying asset, would follow the borrower to their grave, basically meaning all the risk is with the borrower and not the lender.

This case is an example of a properly balanced system where a borrower who hits repayment difficulties and the bank who provided the loan, both experience the fallout of the risk coming to fruition. The borrower is in a six-year PIA, the bank has taken a large write down.

No moral hazard at all.

1874

Franz Von Peppercorn wrote: »

The 343,785 is the mortgage she owed at write-down not the price of the house or the original mortgage. Interest and fees accumulate if you stop paying.

How or why did she stop paying when she was earning 2900 net per month? if she was working and earning that?
I can understand how someone could get into debt if they didnt have a job and couldnt sustain their outgoing costs, and then end up spending money servicing debts say for example on credit cards and fall into debt cycle, but she was working, why wasnt she paying the mortgage, I didnt see it in the article either, but I suspect it must be the case otherwise, how is the mortgage cost so high.
If penalties and to some extent interest has been cut from the costs, then ok, but how did they occur?

Pussyhands

seamus wrote: »

Seem reasonable to me. She's on a stable, but relatively fixed income being a civil servant, therefore very little prospect of increasing her earnings into the future. She can afford €900/month in payments, leaving €2k to support herself and her daughter.

If she'd been the one gambling, I'd have less sympathy. But she got shackled to some PoS who racked up a pile of debts and then fncked off.

PTSB should be chasing him for the balance.

The lack of empathy from people in this thread is something else. She should be kicked out of the house because her husband was a scumbag and loaded her with debt? Nice humanity there.

Was her name on the mortgage? That's her fault for marrying a POS then.

You can't just pick and choose after the fact!

These are the risks of doing these things. Pay your debts!!!!

If I take a loan for 20k tomorrow for a new diesel car and then the arse falls out of diesels the next day, can I get half my debt wiped off too?

Pussyhands

Xterminator wrote: »

nothing socialist about it.

FFS why is it okay for the bank to write down 10's of thousands of mortgages and see them, but wrong to write down a single one ?

Value was written down to current market value of the house. If the poor woman was turfed out and the house sold that is all they would get anyway. It is simply a practical solution to a sad situation.

Should we all extend ourselves fully in the current housing market knowing that if house prices were to fall we too are deserving of getting chunks of the debt wiped off?

It's a 0 sum game. If she's not paying for it, someone else is and why should someone else suffer for poor decisions she made?

meeeeh

Nermal wrote: »

Moral hazard. The reason why we have the highest mortgage interest rates in the Eurozone.

Whose moral hazard though? We are paying 1.05% interest rate on our mortgage because banks were at one stage so eager to throw money at people with lowest possible interest rate. PTSB are especially guilty. Some people are paying the highest rates in Europe because I'm pretty sure a lot of us are paying the lowest.

Franz Von Peppercorn

1874 wrote: »

How or why did she stop paying when she was earning 2900 net per month? if she was working and earning that?
I can understand how someone could get into debt if they didnt have a job and couldnt sustain their outgoing costs, and then end up spending money servicing debts say for example on credit cards and fall into debt cycle, but she was working, why wasnt she paying the mortgage, I didnt see it in the article either, but I suspect it must be the case otherwise, how is the mortgage cost so high.
If penalties and to some extent interest has been cut from the costs, then ok, but how did they occur?

I don’t know I was just explaining the write down was partly a write down of fees and interest etc.

I don’t condone not paying if you can.

Franz Von Peppercorn

meeeeh wrote: »

Whose moral hazard though? We are paying 1.05% interest rate on our mortgage because banks were at one stage so eager to throw money at people with lowest possible interest rate. PTSB are especially guilty. Some people are paying the highest rates in Europe because I'm pretty sure a lot of us are paying the lowest.

Don’t rub it in, mate :-)

1874

Pussyhands wrote: »

Was her name on the mortgage? That's her fault for marrying a POS then.

You can't just pick and choose after the fact!

These are the risks of doing these things. Pay your debts!!!!

Well, thats where I disagree, marriage seems to be used as an excuse to shackle you to someone and they can change who they are overnight and they effectively own you/by which I mean they can influence how you are dealt with based on their behaviour, and you can do nothing about it, which I think is wrong.
Should be able to get out of marriage easier and quicker, 2 years max, maybe even 1 year. Personally I wouldnt recoomend marriage to anyone, because of $hit like this, can just be living with someone, except the State pushes marriage so you are shackled to a person, or you dont get the same rights of inheritence and tax credit transfers, which in this day and age I think is draconian. Should be able to state someone is your life partner and be able to transfer rights entitlements to them on that basis or remove them rapidly if you so choose, that or be able to get out of marriages easier.

She may not have known he was a POS, and likewise for guys marrying, they can not know who a person is, because its possible they only find out afterwards.


If she was working, she should have kept paying the mortgage and not had anything to do with his debts from loan sharks, personally Id have gotten the Gardai involved in that if there were any threats or worse.
what we dont know is how was she with her own finances? living it up new cars and holidays or just wasting her money on crap? its hard to see where 2900 net per month went, so if she was not sensible with her money then I dont believe that should be rewarded even if her husband was a POS, then she's responsible too.

Eric Cartman

Sleepy wrote: »

Where in the hell is she living that a property bought for €343,785 in 2005 is only worth €160,000 in 2019?

I know the recovery has been slower in some areas than others but they didn't even buy at the peak?

One of the pyrite areas in the midlands id imagine