House repossessions 'set to soar'

opinion guy · 07-02-2011 01:07PM

Earthhorse wrote: »

If you restructure the debt of people in arrears then where's the incentive for those not in arrears to continue paying their mortgages? If they know that repossession isn't really on the cards then they can just stop paying their mortgage and wait for the banks to renegotiate.

If you don't restructure debt and start the repo game.....house prices will further crumble.....more people will be in negative equity.........more people will not be able to make repayments.........more people will defualt and their houses repossessed.

It does not make any sense to start repoing houses - it will only accelerate the problem and hurt the banks more in the long run.

The only option is to restructure debt.

And why should home owners not have their debt restructured ? After all the banks had their debts restructured. Home owners should not be the ones to suffer because of an utterly corrupt banking industry.

Dempo1 · 07-02-2011 01:14PM

Liam_Flag wrote: »

Can't wait to check out some knock down prices for houses.

So your looking forward to check out knock down prices on repossessed family homes, Hmmmmm, i sincerely hope yours is not one of them.

Are we not already witnessing knock down prices even before the predicted massive repossessions? what difference has it made?

No one is buying
Few if any are being granted mortgages
Prices are rock bottom as it is
No one can sell, even if they wanted too!

The entire situation is Bizarre, banks don't want massive default and yet they are hiking interest rates

Banks even if they did repossess will find it near impossible to sell on properties and even if they do, only at massive losses if we are to believe the negative equity mantra

Government will be forced into housing thousands of families at a far higher cost of current supports which are minimal

Seems all that is likely to happen is some use for ghost estates.

Its a ****ing mess and getting worse by the day.

Monty Burnz · 07-02-2011 01:18PM

Wibbs wrote: »

One chap I know who is in trouble(and it is genuinely little fault of his or his wife, just a run of bad circumstance), has said if the day comes that the sheriff shows to his home he'll take "action against him" as he puts it. People talk shíte of this nature, but this chap I would believe 100%. He figures at that stage he would have nothing to lose.

I hope your friend appreciates that the sheriff is just a normal schmoe like himself just doing a job before he kills the guy or whatever he has in mind.

Monty Burnz · 07-02-2011 01:20PM

opinion guy wrote: »

If you don't restructure debt and start the repo game.....house prices will further crumble.....more people will be in negative equity.........more people will not be able to make repayments.........more people will defualt and their houses repossessed.

I think you are confusing some things here - more people being in negative equity (which is a certainty) does not mean that more people will not be able to make repayments.

Monty Burnz · 07-02-2011 01:22PM

Dempo1 wrote: »

So your looking forward to check out knock down prices on repossessed family homes, Hmmmmm, i sincerely hope yours is not one of them.

Are we not already witnessing knock down prices even before the predicted massive repossessions? what difference has it made?

Prices have fallen, but property is not cheap by any stretch of the imagination. It will have to fall by 50% or so again before it looks like value by any metric.

If I offer you a mars bar for a tenner, then cut it to five euro, it's still not cheap, is it?

Dempo1 · 07-02-2011 01:28PM

Just wondered when people are going to cop onto the fact all walks of life and sections of society are in serious trouble with their mortgages, in addition there are those obsessed with the notion everyone gambled, took out ridiculous mortgages and that everyone is in negative equity, indeed FG seem to foolishly think only those who took out mortgages after 2004 need assistance or are in trouble.

Jesus Christ, there is as many people who took out sensible mortgages as there are those who perhaps where caught in the property bubble, there are those who paid their mortgages problem free for over a decade who know find themselves struggling whether it be unemployment, loss in salary, massive increases in cost of living (despite the horse**** of the last government), and to top it off increased taxes.

I for one am tired of this Negative equity mantra which would only be an issue if the mortgage holder trys to sell (a challenging prospect in the current market)

swords41 · 07-02-2011 01:29PM

Sanjuro wrote: »

I went through that with my parents in the 80's recession. It was pretty awful. Wouldn't wish it on anyone. Cant imagine what it'd be like for a parent to have to break it to the kids.

You can fight these banks to keep your home

http://www.bankofireland.me/

Dempo1 · 07-02-2011 01:31PM

Monty Burnz wrote: »

Prices have fallen, but property is not cheap by any stretch of the imagination. It will have to fall by 50% or so again before it looks like value by any metric.

If I offer you a mars bar for a tenner, then cut it to five euro, it's still not cheap, is it?

I more resented your apparent Glee on the back of those who face repossession at the start of your post.

Yes, i agreed that prices have dropped and in some cases more than 50% but i wondered how low do they have to go (Perhaps 100%)

The Point is, what is the Point of the Banks approach and Government inaction, no one, yes no one gains with a massive default.

arybvtcw0eolkf · 07-02-2011 01:32PM

Sanjuro wrote: »

I went through that with my parents in the 80's recession. It was pretty awful. Wouldn't wish it on anyone. Cant imagine what it'd be like for a parent to have to break it to the kids.

OK, I was avoiding this.. But here goes!.

I can understand that completely.

Although in a different situation to a lot of people I grew up in a corpo flat in Ballymun, mortages were for other people at that time - but we weren't strangers to evictions.

Although we were never evicted some of our neighbours were, usually it mean't off to the 'flats' (tenaments really) in Summerhill, Sean Mac St. or Gardiner St - were incidently I originate from Summerhill.

I remember more than once going down to 'the rent man' and my mother pleading for them just to take even a small amount off her for the rent when we'd be in rent arrears - we dreaded being evicted.

Sometimes I think I come across as overly soft in some threads, but I try to be very honest on boards.ie - but I wasn't rared in a bed of roses and I can usually identify with people in difficulties, and sometimes that can press on a raw nerve.

Sorry for the little rent/off topic story.

Earthhorse · 07-02-2011 01:32PM

opinion guy wrote: »

If you don't restructure debt and start the repo game.....house prices will further crumble.....more people will be in negative equity.........more people will not be able to make repayments.........more people will defualt and their houses repossessed.

If these people can't make their existing payments then there's every possibility that they won't make a restructured deal; in many cases it will make sense to repossess and sell to someone who can make such payments.

It does not make any sense to start repoing houses - it will only accelerate the problem and hurt the banks more in the long run.

Not true. Some amount of repossession will have to take place. It's the difference between not receiving any money at all and receiving some money.

The only option is to restructure debt.

Again, not true. If repossession makes no sense why does it even exist in our vocabulary? Banks repossess assets all the time, it's to be expected that activity will increase after a property bubble.

And why should home owners not have their debt restructured ? After all the banks had their debts restructured. Home owners should not be the ones to suffer because of an utterly corrupt banking industry.

What should happen in the world and what does happen in the world are two entirely different things.

RichieC · 07-02-2011 01:38PM

you could probably understand the banks needing to repo only they took billions off the Irish people who are now in dept until...hmm.. I actually haven't looked to see even how many years we'll be paying off the IMF bailout.. we be likely broke just servicing the fking interest... though I guess thats the point of these bailouts

Monty Burnz · 07-02-2011 01:39PM

Dempo1 wrote: »

I more resented your apparent Glee on the back of those who face repossession at the start of your post.

Yes, i agreed that prices have dropped and in some cases more than 50% but i wondered how low do they have to go (Perhaps 100%)

The Point is, what is the Point of the Banks approach and Government inaction, no one, yes no one gains with a massive default.

Sorry, what glee??

I think that something needs to be done for sure - but it has to entail some pain for those bailed out as well as for those doing the bailing. Otherwise, as someone else pointed out, nobody will pay anymore and the whole country will collapse. (When I say 'some pain', I mean for example that a reduced mortgage only buys a reduced amount of the house, that sort of thing)

Monty Burnz · 07-02-2011 01:42PM

RichieC wrote: »

you could probably understand the banks needing to repo only they took billions off the Irish people who are now in dept until...hmm.. I actually haven't looked to see even how many years we'll be paying off the IMF bailout.. we be likely broke just servicing the fking interest... though I guess thats the point of these bailouts

Yup. And every penny that the bank leaves the people in arrears off is another penny that we all have to find to pump back into the bank that isn't receiving it.

It's a horrible mess. Thank the regulator and Fianna Fail. (and the clowns managing the banks, but then they should never have been allowed jeopardise the rest of us)

opinion guy · 07-02-2011 01:50PM

Monty Burnz wrote: »

I think you are confusing some things here - more people being in negative equity (which is a certainty) does not mean that more people will not be able to make repayments.

No buddy you are confused. I did not say that more people in negative equity will lead to more people not being able to make repayments. I said that both those things would happen. I did not imply a casual link.

Earthhorse wrote: »

If these people can't make their existing payments then there's every possibility that they won't make a restructured deal; in many cases it will make sense to repossess and sell to someone who can make such payments.

But noone is buying. Who are you going to sell to ?

Not true. Some amount of repossession will have to take place. It's the difference between not receiving any money at all and receiving some money.

Usually. But we are not in usual circumstances now are we ?
I do think for example repo's should be allowed of second houses or more houses for example. But someone's home should not be allowed to be taken away from them.

Again, not true. If repossession makes no sense why does it even exist in our vocabulary? Banks repossess assets all the time, it's to be expected that activity will increase after a property bubble.

But again you are missing the point that these aren't usual circumstances. This crash has in large part been brought about by the banks themselves. Repossession may make sense in certain market circumstances but it certainly does not at the moment.

What should happen in the world and what does happen in the world are two entirely different things.

Oh I agree with you there. But laws can be rewritten. Seems our government forget that. If only we had leaders in power with the balls the Icelandic leaders had

brianthebard · 07-02-2011 02:02PM

opinion guy wrote: »

Oh I agree with you there. But laws can be rewritten. Seems our government forget that. If only we had leaders in power with the balls the Icelandic leaders had

I'm pretty sure (not 100% but 90%ish) that the Icelandic leaders had agreed to do the exact same as the Irish government did, but the people would not pass the bill by referendum.

Earthhorse · 07-02-2011 02:05PM

opinion guy wrote: »

But noone is buying. Who are you going to sell to ?

There are plenty of people, like myself and many of my friends, who did not buy during the boom. There are buyers out there for these houses at the right price. In the wake of property bubbles it's not unusual to see property be sold for cash.

Usually. But we are not in usual circumstances now are we ?
I do think for example repo's should be allowed of second houses or more houses for example. But someone's home should not be allowed to be taken away from them.

We are not in usual circumstances no but we are not in unprecedented circumstances either. I don't see why someone should be allowed to hold onto an asset which they can no longer afford.

But again you are missing the point that these aren't usual circumstances. This crash has in large part been brought about by the banks themselves. Repossession may make sense in certain market circumstances but it certainly does not at the moment.

Why not?

Monty Burnz · 07-02-2011 02:05PM

opinion guy wrote: »

No buddy you are confused. I did not say that more people in negative equity will lead to more people not being able to make repayments. I said that both those things would happen. I did not imply a casual link.

Apologies, but I think you can see how your post might have read that way.

opinion guy wrote: »

But noone is buying. Who are you going to sell to ?

Nobody is buying at current levels. A price exists where buyers will outnumber sellers. If I could buy a nice 4 bed house in Ranelagh or Dalkey or somewhere for 200k I'd buy it tomorrow - and I'm in no rush. Other people will buy at higher prices. The point is that if something useful isn't selling, there's usually only one reason - the asking price is too high.

Fighting Irish · 07-02-2011 02:08PM

opinion guy wrote: »

If you don't restructure debt and start the repo game.....house prices will further crumble.....more people will be in negative equity.........more people will not be able to make repayments.........more people will defualt and their houses repossessed.

Great! So then all of us who didn't buy over priced housing can afford a house!

gurramok · 07-02-2011 02:14PM

Monty Burnz wrote: »

Nobody is buying at current levels. A price exists where buyers will outnumber sellers. If I could buy a nice 4 bed house in Ranelagh or Dalkey or somewhere for 200k I'd buy it tomorrow - and I'm in no rush. Other people will buy at higher prices. The point is that if something useful isn't selling, there's usually only one reason - the asking price is too high.

To further back this up, there are buyers out there still http://www.ibf.ie/gns/media-centre/news/10-11-30/Home_Purchasers_Dominate_Mortgage_Market.aspx

"7,261 new mortgages to the value of €1.24 billion were issued during the third quarter of 2010."

Its the amount of buyers that has been drastically reduced since the peak of 2006, there are always buyers who will buy at the right price in 2011.

Occam · 07-02-2011 02:44PM

opinion guy wrote: »

If you don't restructure debt and start the repo game.....house prices will further crumble.....more people will be in negative equity.........more people will not be able to make repayments.........more people will defualt and their houses repossessed.

Why would more people in negative equity mean more people in default? Default usually results from unemployment, not negative equity.

opinion guy wrote: »

It does not make any sense to start repoing houses - it will only accelerate the problem and hurt the banks more in the long run.

This will artificially prop up prices. At the moment, first time buyers are almost all waiting for the bottom of the market. While some feel that it is already there, most are waiting for what is seen as an inevitable fire sale of properties.

What will hurt the banks in the long term is a stagnant property market, which is what we have now. The only long term solution is to let property values to bottom out, and get the market moving again.

opinion guy wrote: »

The only option is to restructure debt.

And why should home owners not have their debt restructured ? After all the banks had their debts restructured. Home owners should not be the ones to suffer because of an utterly corrupt banking industry.

Depends on what you mean by debt restructuring. Many of the people with loans in default have no realistic prospect of ever paying the capital back over *any* term, never mind interest. Can't see how it can be restructured in that case.

If you really mean debt forgiveness well that's a different thing altogether....

Fratton Fred · 07-02-2011 02:44PM

Out of curiosity, what happens to your mortgage if the banks go bust?

Lumen · 07-02-2011 02:45PM

Fratton Fred wrote: »

Out of curiosity, what happens to your mortgage if the banks go bust?

The debt gets sold on as an asset.

Earthhorse · 07-02-2011 02:45PM

Fratton Fred wrote: »

Out of curiosity, what happens to your mortgage if the banks go bust?

If a bank goes bust another bank will probably take over their book.

Mr. Presentable · 07-02-2011 02:46PM

Fratton Fred wrote: »

Out of curiosity, what happens to your mortgage if the banks go bust?

I imagine the assets (mortgages etc) will be sold to cover debts. So you will just owe the money to another bank.

Occam · 07-02-2011 02:47PM

Fratton Fred wrote: »

Out of curiosity, what happens to your mortgage if the banks go bust?

Mortgages would either be sold (auctioned) to other lenders to raise funds, or possibly exchanged with other institutions to repay bank debt.

So basically for the homeowner, you will just end up paying the debt to someone else.

Fratton Fred · 07-02-2011 02:50PM

And what if that debt can't be sold? I would imagine the entire Irish market would be classed as sub prime these days.

Occam · 07-02-2011 02:52PM

Fratton Fred wrote: »

And what if that debt can't be sold? I would imagine the entire Irish market would be classed as sub prime these days.

Of course it can be sold. Its the price at which it is sold that is in question. Plenty of vultures, internationally, that would take advantage of it.

JohnathanM · 07-02-2011 02:52PM

Fratton Fred wrote: »

And what if that debt can't be sold? I would imagine the entire Irish market would be classed as sub prime these days.

Then somebody would pay cents on the Euro, and still stick you with repayments. With a weak enough market, investors would buy debt to win either way: you pay, or they get property at a snip to rent out over a long term.

chicken fingers · 07-02-2011 02:57PM

Fratton Fred wrote: »

And what if that debt can't be sold? I would imagine the entire Irish market would be classed as sub prime these days.

Debt is always sold, it is always the first thing to be sold off.
And believe me, if AIB cant get money from those repossessions, the debt will be sold on. And if the germans, arabs, chinese or what-have-you buy blocks of mortgages they will pay a real price and re-sell them on at a real price.

It might be grim but did they not realise when they were signing that this was a possibility?
People who cannot add value or generate wealth for any company right now are of course unemployed, and largely unemployable in a functioning competitive economy.

Anyways this should have happened before but the weasels in Leinster House just delayed the onslaught by a year.
Roll-on, evict the people (they are almost all in negative equity anyways), let housing prices fall to its real level, rents should fall and then they can rent.
Thats economics and thats life.

Occam · 07-02-2011 02:58PM

Occam wrote: »

Of course it can be sold. Its the price at which it is sold that is in question. Plenty of vultures, internationally, that would take advantage of it.

Just to elaborate here, what would happen is the same as would happen other companies. Liquidator\Receiver would create a list of assets ( cash in the vaults, mortgages, bank owned properties etc) and a list of liabilities ( deposit holders, inter bank loans, bills etc ). Assets are then sold to pay off liabilities. In the case of the banks, assets likely to cover a small fraction of liabilities.

Deposit holders likely to be last on the list of creditors to be paid, so they would have to avail of the states deposit guarantee.

House repossessions 'set to soar'

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