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Mortgage Arrears Problem in Ireland.

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    #512
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    sarumite wrote: »
    No one "had" to pay over the odds...those chose to. Furthermore, if you borrow money, you should pay that money back. If the price of your house increases, I doubt you would hand that extra money to the bank so I don't think the reverse should be the case either.


    Yeah but you have to pay a good bit of tax on capital gains do you not..why not the same if you make a loss why not have the gov pay capital loss on a house in neg equity ??? why should this process be one way..


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    #513
    sarumite
    Registered Users Posts: 2,909 ✭✭✭sarumite


    fliball123 wrote: »
    Yeah but you have to pay a good bit of tax on capital gains do you not..why not the same if you make a loss why not have the gov pay capital loss on a house in neg equity ??? why should this process be one way..

    Its the same with shares....you take the risk, you run the gauntlet. If you sell a house for the price you paid for it, then you don't pay capital gains. Capital gains is tax on income, if you don't make a profit on the house then there is no income to tax. As such the government is not taxing "the house" but income you may make on the house (similar to dirt,corporation tax or paye etc). As for it being one way, its always one way....thats the nature of taxes. The government taxes you, you don't tax them.


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    #514
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Rareroastbeef wrote: »
    Unrealistic, I'd love to hear your feedback. smile.gif
    Thanks. And sorry for the delay.
    Rareroastbeef wrote: »
    Also, as far as I am aware, selling off the mortgage for a few pennies would be a last resort for the bank if they thought they might make more than a few pennies with a settlement agreement.
    You proposed allowing the banks to go bust. I outlined the scenario whereby mortgages would be sold off to vulture founds as an explanation of what would happen if the banks did go bust. So, yes, it would be a last resort and it wouldn't be the banks selling off the mortgages. It would be the liquidator.
    Rareroastbeef wrote: »
    Unrealistic wrote: »
    I'm not saying there shouldn't be an interest only period but please stop thinking this is something that can be done by squeezing some imaginary evil bankers. The reality is that we all have to pay for it now.
    When the bankers and main purportrators of the crash are prosecuted, I won't feel that they are evil as I will feel justice will have been done, until this time, I will feel that they are evil. And by the way, I don't think they are imaginary. I think the gov. want's us to think they are imaginary. They helped to cause this and why should we just forget about them so easily and deny they existed.
    I meant imaginary evil bankers in the sense that we could still get them to pay for it. Seanie Fitz and his ilk have been turfed out already or have run. They have left us holding the baby (the banks). Screwing the banks now is not screwing the bankers who helped bring us to our current sorry state. It would just be screwing ourselves because the taxpayer is the only one keeping these banks afloat now.
    Rareroastbeef wrote: »
    Ok, then what if the country/gov enacts legislation to creat a huge 'fixed' interest rate deal among the banks. Let's say at a rate of 5% over 5-7 years, with favourable/fair 'get out' penalties. Surely, this would keep the impact of the ECB's rate rises out of it (similar to ordinary fixed rates.)
    The same as with your other suggestions this is doable but someone has to pay for it. If the bank gave you a mortgage fixed for five years then they borrowed for five years at a slightly lower rate to fund that. If the bank gave you a variable mortgage it was financed by short term or open ended borrowing at closely linked rates. If the rates that the bank pays rise then the bank has to increase the rates it charges accordingly. If you legislate to stop the bank charging a market rate then someone has to pay for that. It's no different from forcing Dunnes Stores to sell bread below cost. We own the banks so we have to pay for it.


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    #515
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Dob74 wrote: »
    That's funny the banks have been bailed out by the gov, so why arent homerowners how had to pay over the odds because of our corrupt planning system.
    The banks haven't been bailed out by the government for the sake of the banks. The people who owned the banks have lost everything. And you should keep in mind that the people who owned the banks were our parents and ourselves; anyone who had money in shares or had an Irish pension which invested in bank shares. The main aim of bank guarantee was to avoid an economic meltdown.

    Home owners had to pay over the odds for a number of reasons but a corrupt planning system was only a minor factor. And, until home owners who paid over the odds are grown up enough to recognise that one of the main reasons they overpaid is that they made an irresponsible decision to borrow too much, I will find it much harder to find sympathy for them.


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    #516
    Jaysoose
    Closed Accounts Posts: 3,212 ✭✭✭Jaysoose


    Mister men wrote: »
    You don't sound like a smartass at all. I did'nt do a college degree and i knew this would happen back in 2001. People got greedy it's that simple.


    Of course you did, thats why you made a fortune buying and selling property before the bubble you spotted ten years ago burst. Fair play.


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    #517
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Jaysoose wrote: »
    Its one warped society we live in when people like Bertie/sean fitz and Ivor calelly can swan around the place while ordinary people (however short sighted) are demonised for looking for help.
    I think Bertie, Seanie Fitz and Ivor Callely should all be jailed, along with many others. Ivor Callely still might get some action. He has only been absolved of the mileage claims on a technicality. The fake mobile phone invoices are still with the Standards In Public Office Commission. Push your public representatives on this and we might see a result. Ray Burke and Liam Lawlor were jailed because public pressure meant a cover up wasn't feasible.

    But, as I've said earlier, I don't think it is as simple as people being demonized for looking for help. I think that it is people being demonized for looking for help while still denying that they bear responsibility for the situation in which they find themselves. Anyone who borrowed more than 3 times earnings; anyone who took out a 90%, 100%, 110% mortgage; anyone who inflated their mortgage by taking out equity to pay for a car, holiday etc.; anyone who borrowed a deposit from a credit union or their parents instead of saving it up through hard graft; anyone who didn't build substantial savings in the good times to cover themselves in the case of a downturn; anyone who did any of these things contributed to the property bubble and is responsible for both the problematic situation they may find themselves in and also for bringing the country to its knees.
    Mister men wrote: »
    You don't sound like a smartass at all. I did'nt do a college degree and i knew this would happen back in 2001. People got greedy it's that simple.
    Some people got greedy. Others just got reckless.
    dearg lady wrote: »
    are you serious, you're 23, and you JUST started working?? if so, you have some cheek to get all on your high horse about people making foolish decisions, and you potentially having to help them, when you have contributed nothing yet.
    He/She is being asked to pay for it so (s)he has every right to have an opinion on the matter. It's a pity more people weren't thinking like him/her five years ago.


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    #518
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    kceire wrote: »
    ferike1 wrote: »
    I am 23 and just started working, I can't even think about buying a house, getting a loan or anything of the sort but my taxes will rise and any potential loan I want to take out (fat chance) will be punitively punished to make up for those who lacked foresight.
    your 23 and only entering the workforce now, so obviously youve been in college, who paid for that? taxes also pay for education and free college education that youve been receiving up until now.
    If ferike1 availed of free education he availed of something that is available to every single citizen and the aim of that is something that is universally accepted to be a good thing, to have an educated population. What he is objecting to is paying for something that is targeted at a specific subset of the population only and it is for a purpose that is much harder to justify in terms of the national good; rewarding people who made the irresponsible decision to borrow more than they could afford by paying for them to stay in overpriced homes.
    De Dannan wrote: »
    ferike1 wrote: »
    you have to be pretty stupid to take out a loan that is an unrealistic amount compared to your salary. If you can't think rationally then don't expect others to do it for you.
    I love the hindsight thats 20/20 around here
    Are you saying that you would not have taken out a mortgage if you were say tens years older and had a family ?

    Its very easy to say that now rolleyes.gif
    It's not just hindsight. There are many people who didn't overstretch themselves. Some saw a crash coming, others just decided they couldn't afford to buy at those prices. Check www.thepropertypin.com, another Irish forum, where people were taking the same position back in 2006.


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    #519
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    sarumite wrote: »
    Its the same with shares....you take the risk, you run the gauntlet. If you sell a house for the price you paid for it, then you don't pay capital gains. Capital gains is tax on income, if you don't make a profit on the house then there is no income to tax. As such the government is not taxing "the house" but income you may make on the house (similar to dirt,corporation tax or paye etc). As for it being one way, its always one way....thats the nature of taxes. The government taxes you, you don't tax them.

    As pointed out by one of the smug people who are giving householders in neg equity a kicking pointed out its an asset...its tax on the profit of an asset..so why not taking some of the loss aswell...

    The problem here that people kicking these people are the fact that one way or the other the tax payer will be paying...I would be of the option of the one which costs the tax payer the least..

    But in our society we have vested interests

    Unmarried mothers - protecting their income from sw
    Unemployed - same as above
    Public sector - protecting their wage
    General worker - Protecting their wage against tax
    People with children - protecting their childrens allowence.

    Firstly if a person is in neg equity lost their job and can no longer afford to pay why is it fair that they cannot hand the keys back and walk away..

    People say that its their fault for going for the loans, well I differ I think its the banks fault. Lets see how many ads were put up on tv, radio, billboards from the bank looking for mortgagees ... They actively tried to recruit and under cut each other...Does the slogan "the bank that likes to say YES" ring a bell...Yet these institutions are now trying to get away with out any blame. As I have said before the bank basically took the risk. They asked for your wage, your bonuses and any other income and they went above the usual 3 times your wage...and did so usually with the understanding that it was a 2 family income...and then the kicker the mortgage approver got a bonus upfront for getting in business.

    They have shown an incompetance in other areas such as their borrowing and now its shown in their lending and not just the builders etc but also your average family with 2.4 kids...yet the builders walk away and the poor sh1tes get slated on here...This cannot be allowed to pass...

    Some ideas

    Forcing the banks to offer a full term fixed rate ala france/germany. the banks got loans for these properties at an all time low.

    If selling a house the gov usually takes a chunk for capital gains ...now this is a neg figure so the gov should give back the same % ...seems fair?

    Reintroduce Mortgage Interest relief for the life time of these mortgage...FG seem to be on board with this one..Good man Enda

    Allow the gov/bank buy back a partial amount of the house/mortgage which if a future sale of the house the bank/gov get first prefence..This is a good idea in my opinion..As say a house bought in 2008 was bought for 250k...The person gets a lend of say 240k...Now they paid a year or so...lost their job etc...they now find they owe 230k for a house worth say 120k..The gov/bank could buy 25% of the house say 30k. This takes a lump away from what the mortgage holder is paying. This 30k if the user is not working could be used to pay the existing mortage...Some given to the person to make life a little easier and give them a bit of breathing space to get a new job..Remember now getting a new job is no long walk out on Friday and new job monday sometimes it takes years now with people in the likes of the building trade or bank employees will need to reskill.

    Set up a new bank get all home owners in neg equity or close to it to switch..This new bank say its state owned could still avail of the ECB low rate and offer it on to these people in trouble. If this bank could offer the existing lenders a cut price say 60% of whats owed. Therefore the banks who are implicit in this sh1tstorm get a bit of the load

    Allow tax payers who are home owners use some of their tax to pay their mortgage..I find it hard to swallow for anyone here who is availing of an allowence which the tax payer is paying for and giving out. The majority of people in this problem have worked for at least 10 years and paid a lot of tax and then I see one poster a 23 y.o who is giving out ...Let me ask you kid what where you doing between 18 and 23 if you were in college it was at my expense if you were on the scratch it was at my expense...

    So let the person without sin or an allowence paid for by the tax payer throw the first stone.

    Also untill all here realise that this is a national problem regardless of if you bought sold as the tax payer will be picking up the tabs...I am not a home owner by the way I am waiting to buy one...I have a good lump sum up...But I do not want to seem smug..I nearly bought a couple of times ..and as I say I got mortgage approval on several occasions but never took the loan....I would like to say I was prudent ...I wasnt it was pure dumb luck..and for every person predicting doom and gloom there was a person predicting everything would be hunky doory...So spare me the people were silly..

    Have you ever heard of propaganda..the gov, banks and media should all be brought to toe for what happened in this country in the naughties


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    #520
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Jaysoose wrote: »
    Of course you did, thats why you made a fortune buying and selling property before the bubble you spotted ten years ago burst. Fair play.
    Try twelve/thirteen years ago. And all you needed to do was watch the Late Late Show.
    1998 coverage on RTE
    https://www.youtube.com/watch?v=a37sRjkLtWw


    1999 Late Late Show
    https://www.youtube.com/watch?v=vzNO4u8AU3Y


    2003 Prime Time (it's not just David McWilliams at this point but even the Central Bank raising red flags)
    https://www.youtube.com/watch?v=I8ypOqx95qw


    If you predict a bubble you don't try to make money on property. The bubble is relatively easy to predict but the timing of it bursting is almost impossible to foresee.


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    #521
    Jaysoose
    Closed Accounts Posts: 3,212 ✭✭✭Jaysoose


    Unrealistic wrote: »
    I think Bertie, Seanie Fitz and Ivor Callely should all be jailed, along with many others. Ivor Callely still might get some action. He has only been absolved of the mileage claims on a technicality. The fake mobile phone invoices are still with the Standards In Public Office Commission. Push your public representatives on this and we might see a result. Ray Burke and Liam Lawlor were jailed because public pressure meant a cover up wasn't feasible.

    But, as I've said earlier, I don't think it is as simple as people being demonized for looking for help. I think that it is people being demonized for looking for help while still denying that they bear responsibility for the situation in which they find themselves. Anyone who borrowed more than 3 times earnings; anyone who took out a 90%, 100%, 110% mortgage; anyone who inflated their mortgage by taking out equity to pay for a car, holiday etc.; anyone who borrowed a deposit from a credit union or their parents instead of saving it up through hard graft; anyone who didn't build substantial savings in the good times to cover themselves in the case of a downturn; anyone who did any of these things contributed to the property bubble and is responsible for both the problematic situation they may find themselves in and also for bringing the country to its knees.


    Some people got greedy. Others just got reckless.


    He/She is being asked to pay for it so (s)he has every right to have an opinion on the matter. It's a pity more people weren't thinking like him/her five years ago.

    Wow...some very big assumptions here along with some massive generalisations, what about people that lost their jobs and find themselve in difficulties are they absolving themselves of repsponsibility as they cant pay?

    What about the bowl berty telling everybody that things are rosy and keep going lads...what about the bankers telling us everything is spot on..keep it up guys work away.

    Some people were stupid yes but to tar everybody with the same brush using your examples is a load of bullsh1t and your view on things is as far from the truth as berty talking about people 'cribbing and moaning'.


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    #522
    dearg lady
    Closed Accounts Posts: 2,091 ✭✭✭dearg lady


    Unrealistic wrote: »
    He/She is being asked to pay for it so (s)he has every right to have an opinion on the matter. It's a pity more people weren't thinking like him/her five years ago.

    I still think it's pretty shocking to have never held a job at 23.
    I;m not suggesting he shoudln't have an opinion, merely that someone at age 23, who has never worked, has a limited, or maybe skewed view of the world, is probably not in a position to look down on others for their 'foolish' decisions.
    Give it some time, there's a chance he'll make similar mistakes.


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    #523
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    fliball123 wrote: »
    Firstly if a person is in neg equity lost their job and can no longer afford to pay why is it fair that they cannot hand the keys back and walk away..
    This is probably one of the fairer solutions although it would still cost the taxpayer who would be funding the bank's realised lost.
    fliball123 wrote: »
    People say that its their fault for going for the loans, well I differ I think its the banks fault. Lets see how many ads were put up on tv, radio, billboards from the bank looking for mortgagees ... They actively tried to recruit and under cut each other...Does the slogan "the bank that likes to say YES" ring a bell...Yet these institutions are now trying to get away with out any blame. As I have said before the bank basically took the risk. They asked for your wage, your bonuses and any other income and they went above the usual 3 times your wage...and did so usually with the understanding that it was a 2 family income...and then the kicker the mortgage approver got a bonus upfront for getting in business.
    Do you really not see that this argument is one most people left behind in childhood? Blaming your actions on the bigger boys as if you had no free choice of your own. Try using this excuse on your partner to explain infidelity and see how far you get. "But she offered me this, that, and the other, and I just couldn't resist." For a grown adult decisions have consequences and, when making one of the biggest decisions of your life is the time when you should make the most effort to consider the consequences.
    fliball123 wrote: »
    Forcing the banks to offer a full term fixed rate ala france/germany. the banks got loans for these properties at an all time low.
    Good idea for the future but it won't help us now. The banks got the initial financing to fund current mortgages at very low rates but that was short term financing, which is why they only offered mortgages fixed for a few years. If you want a rate fixed for the full term now then it is going to have to be in the teens at least.
    fliball123 wrote: »
    Allow the gov/bank buy back a partial amount of the house/mortgage which if a future sale of the house the bank/gov get first prefence..This is a good idea in my opinion..As say a house bought in 2008 was bought for 250k...The person gets a lend of say 240k...Now they paid a year or so...lost their job etc...they now find they owe 230k for a house worth say 120k..The gov/bank could buy 25% of the house say 30k. This takes a lump away from what the mortgage holder is paying. This 30k if the user is not working could be used to pay the existing mortage...Some given to the person to make life a little easier and give them a bit of breathing space to get a new job
    Another good idea that I think has been floated elsewhere as well.
    fliball123 wrote: »
    Therefore the banks who are implicit in this sh1tstorm get a bit of the load
    The people who owned the banks when this sh!storm hit have already lost everything. There is no one left to 'get a bit of the load' except ourselves, the taxpayers who are keeping the banks afloat.


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    #524
    dearg lady
    Closed Accounts Posts: 2,091 ✭✭✭dearg lady


    fliball123 wrote: »
    Firstly if a person is in neg equity lost their job and can no longer afford to pay why is it fair that they cannot hand the keys back and walk away..
    agreed, it's seems the simplest solution, we need our bankruptcy laws changed.

    Some interetsing ideas in the rest of your post, will have to have agood read of them :)


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    #525
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Jaysoose wrote: »
    Wow...some very big assumptions here along with some massive generalisations, what about people that lost their jobs and find themselve in difficulties are they absolving themselves of repsponsibility as they cant pay?
    People who lost their jobs deserve help. People who were self-employed and lost their income deserve help that we are not giving them. I never said people shouldn't get help and I am only aiming my comments at those who behaved recklessly, not at everyone who took out a mortgage.

    I listed five common practices that I view as being reckless. If you disagree with any of them maybe you can say which ones and why?

    1. Borrowing more than 3 times earnings.
    2. Taking out a 90%, 100%, 110% mortgage
    3. Taking out equity to pay for a car, holiday etc.
    4. Borrowing a deposit from a credit union or their parents instead of saving it up through hard graft.
    5. Failing to build substantial savings in the good times to cover themselves in the case of a downturn
    Jaysoose wrote: »
    What about the bowl berty telling everybody that things are rosy and keep going lads...what about the bankers telling us everything is spot on..keep it up guys work away.
    Bertie who we already knew from the Mahon tribunal was in hock to vested interests and the bankers, sure they have your interests at heart. It doesn't have to be about what politicians tell you or what bankers tell you on the news. I've written earlier in this thread that I believe there are many people responsible for this situation; government, banks, media, estate agents, developers and property buyers. My issue is with people correctly apportioning blame to others but failing to recognise that they should also share some of the responsibility themselves.
    Jaysoose wrote: »
    Some people were stupid yes but to tar everybody with the same brush using your examples is a load of bullsh1t
    As I said above, I'm not tarring everyone with the same brush. I have criticised only those people who behaved in a specific way and I have explained why.
    Jaysoose wrote: »
    your view on things is as far from the truth as berty talking about people 'cribbing and moaning'.
    Which part of what I wrote is untrue? I'd be happy to argue it if you would point it out.


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    #526
    sarumite
    Registered Users Posts: 2,909 ✭✭✭sarumite


    fliball123 wrote: »
    As pointed out by one of the smug people who are giving householders in neg equity a kicking pointed out its an asset...its tax on the profit of an asset..so why not taking some of the loss aswell...

    The problem here that people kicking these people are the fact that one way or the other the tax payer will be paying...I would be of the option of the one which costs the tax payer the least..

    Lets lay off with the hyperbole firstly. This "smug" and "kicking" language doesn't encourage genuine discussion. As to why they don't take the loss as well....as I said, its a tax....its a one way street. When a company reports a profit, the government tax the profit....when they report a loss, the government doesn't tax.
    But in our society we have vested interests

    Unmarried mothers - protecting their income from sw
    Unemployed - same as above
    Public sector - protecting their wage
    General worker - Protecting their wage against tax
    People with children - protecting their childrens allowence.
    I think its fair to say mortgage holders do get help from the government....and for the most part mortgage holders will also be a "public sector" or "general worker" and may also have children so are part of the 'vested interests' you speak of.

    Firstly if a person is in neg equity lost their job and can no longer afford to pay why is it fair that they cannot hand the keys back and walk away..

    As has been said before, when people were selling houses and making a profit they didn't give that profit to the banks so I don't see why they expect the banks to take the loss. In general terms, if you borrow money from someone, you should pay that money back....what you do with the money is your business.
    People say that its their fault for going for the loans, well I differ I think its the banks fault. Lets see how many ads were put up on tv, radio, billboards from the bank looking for mortgagees ... They actively tried to recruit and under cut each other...Does the slogan "the bank that likes to say YES" ring a bell...Yet these institutions are now trying to get away with out any blame. As I have said before the bank basically took the risk. They asked for your wage, your bonuses and any other income and they went above the usual 3 times your wage...and did so usually with the understanding that it was a 2 family income...and then the kicker the mortgage approver got a bonus upfront for getting in business.

    Again....the banks may have opened their door to you, perhaps even made it appear more appealing than it actually was.....but ultimately you chose to walk in, they didn't drag you off the street. There is enough blame to go around to the banks as well, but that doesn't divorce a mortgage holder from their responsibility.


    If selling a house the gov usually takes a chunk for capital gains ...now this is a neg figure so the gov should give back the same % ...seems fair?

    If you are in negative equity, then chances are you won't pay any capital gains....so they would not be 'giving it back'. The government tax income. If you make income on a house, they will tax it. Nobody ever said income tax was fair.

    Allow the gov/bank buy back a partial amount of the house/mortgage which if a future sale of the house the bank/gov get first prefence..This is a good idea in my opinion..As say a house bought in 2008 was bought for 250k...The person gets a lend of say 240k...Now they paid a year or so...lost their job etc...they now find they owe 230k for a house worth say 120k..The gov/bank could buy 25% of the house say 30k. This takes a lump away from what the mortgage holder is paying. This 30k if the user is not working could be used to pay the existing mortage...Some given to the person to make life a little easier and give them a bit of breathing space to get a new job..Remember now getting a new job is no long walk out on Friday and new job monday sometimes it takes years now with people in the likes of the building trade or bank employees will need to reskill.

    In principle it could work.....if the government wasn't broke. Unfortunately there is no money to buy that portion of the house.

    Set up a new bank get all home owners in neg equity or close to it to switch..This new bank say its state owned could still avail of the ECB low rate and offer it on to these people in trouble. If this bank could offer the existing lenders a cut price say 60% of whats owed. Therefore the banks who are implicit in this sh1tstorm get a bit of the load

    This could work....though it still wouldn't protect mortgage holders from the inevitable rise in the ECB base rate. Where does the "new bank" get the capital to purchase the mortage from the "old bank"?

    Allow tax payers who are home owners use some of their tax to pay their mortgage..I find it hard to swallow for anyone here who is availing of an allowence which the tax payer is paying for and giving out. The majority of people in this problem have worked for at least 10 years and paid a lot of tax and then I see one poster a 23 y.o who is giving out ...Let me ask you kid what where you doing between 18 and 23 if you were in college it was at my expense if you were on the scratch it was at my expense...

    You shouldn't be given a tax break just because you were lucky enough to own your own hosue. Using your tax money to pay for your asset is no difference than simply not paying that tax and then using it to pay for your asset. I have worked for 10 years, I don't own a home but you want me to pay more tax than you because you own home?


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    #527
    Jaysoose
    Closed Accounts Posts: 3,212 ✭✭✭Jaysoose


    Unrealistic wrote: »
    Try twelve/thirteen years ago. And all you needed to do was watch the Late Late Show.
    1998 coverage on RTE
    https://www.youtube.com/watch?v=a37sRjkLtWw


    1999 Late Late Show
    https://www.youtube.com/watch?v=vzNO4u8AU3Y


    2003 Prime Time (it's not just David McWilliams at this point but even the Central Bank raising red flags)
    https://www.youtube.com/watch?v=I8ypOqx95qw


    If you predict a bubble you don't try to make money on property. The bubble is relatively easy to predict but the timing of it bursting is almost impossible to foresee.

    Quoting other peoples research after the event doesnt make you an expert either.


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    #528
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    Jaysoose wrote: »
    Quoting other peoples research after the event doesnt make you an expert either.
    I never said I was an expert. I said earlier in this thread that I didn't see the collapse coming. I did take out a mortgage, it was just a sensible one and it was in another country because I decided I couldn't afford to buy in Ireland at those prices.

    How about instead of those throw away lines you try to back up some of those earlier assertions? Tell us why you think my definition of reckless behaviour is wrong. Tell us what you think was untrue in what I wrote.


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    #529
    Jaysoose
    Closed Accounts Posts: 3,212 ✭✭✭Jaysoose


    Unrealistic wrote: »
    I never said I was an expert. I said earlier in this thread that I didn't see the collapse coming. I did take out a mortgage, it was just a sensible one and it was in another country because I decided I couldn't afford to buy in Ireland at those prices.

    How about instead of those throw away lines you try to back up some of those earlier assertions? Tell us why you think my definition of reckless behaviour is wrong. Tell us what you think was untrue in what I wrote.


    Its hard to prove that your generalised statements may opr may not be true about a tiny percentage in that group, it doesnt mean your opinion is correct just that it cant be proved incorrect.

    Why dont you provide some individual case studies with figures to back up your sweeping statements? bet you cant.


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    #530
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Unrealistic wrote: »
    People who lost their jobs deserve help. People who were self-employed and lost their income deserve help that we are not giving them. I never said people shouldn't get help and I am only aiming my comments at those who behaved recklessly, not at everyone who took out a mortgage.

    I listed five common practices that I view as being reckless. If you disagree with any of them maybe you can say which ones and why?

    1. Borrowing more than 3 times earnings.
    2. Taking out a 90%, 100%, 110% mortgage
    3. Taking out equity to pay for a car, holiday etc.
    4. Borrowing a deposit from a credit union or their parents instead of saving it up through hard graft.
    5. Failing to build substantial savings in the good times to cover themselves in the case of a downturn


    Bertie who we already knew from the Mahon tribunal was in hock to vested interests and the bankers, sure they have your interests at heart. It doesn't have to be about what politicians tell you or what bankers tell you on the news. I've written earlier in this thread that I believe there are many people responsible for this situation; government, banks, media, estate agents, developers and property buyers. My issue is with people correctly apportioning blame to others but failing to recognise that they should also share some of the responsibility themselves.


    As I said above, I'm not tarring everyone with the same brush. I have criticised only those people who behaved in a specific way and I have explained why.


    Which part of what I wrote is untrue? I'd be happy to argue it if you would point it out.

    The one fundamental issue with your bold is that it takes 2 to tango...it takes one to get the loan and one to give the loan

    From an individual mortgage point of view..what pain at present are the banks seeing from this individual deal that they fully participated in.

    In fact they are trying to fcuk over these people by increasing their interest rates...


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    #531
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    fliball123 wrote: »
    In fact they are trying to fcuk over these people by increasing their interest rates...
    The interest rates are still unrealistically low. Banks can't borrow at less that 6% or so (the rate that the government is paying). Add on a margin of 1.5% and you have a standard variable rate of 7.5%.

    At some point, the rates charged to customers are going to have to match up to what it costs the banks to borrow. It's going to get a lot, lot messier yet I think.


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    #532
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    sarumite wrote: »
    Lets lay off with the hyperbole firstly. This "smug" and "kicking" language doesn't encourage genuine discussion. As to why they don't take the loss as well....as I said, its a tax....its a one way street. When a company reports a profit, the government tax the profit....when they report a loss, the government doesn't tax.


    I think its fair to say mortgage holders do get help from the government....and for the most part mortgage holders will also be a "public sector" or "general worker" and may also have children so are part of the 'vested interests' you speak of.



    As has been said before, when people were selling houses and making a profit they didn't give that profit to the banks so I don't see why they expect the banks to take the loss. In general terms, if you borrow money from someone, you should pay that money back....what you do with the money is your business.



    Again....the banks may have opened their door to you, perhaps even made it appear more appealing than it actually was.....but ultimately you chose to walk in, they didn't drag you off the street. There is enough blame to go around to the banks as well, but that doesn't divorce a mortgage holder from their responsibility.




    If you are in negative equity, then chances are you won't pay any capital gains....so they would not be 'giving it back'. The government tax income. If you make income on a house, they will tax it. Nobody ever said income tax was fair.




    In principle it could work.....if the government wasn't broke. Unfortunately there is no money to buy that portion of the house.



    This could work....though it still wouldn't protect mortgage holders from the inevitable rise in the ECB base rate. Where does the "new bank" get the capital to purchase the mortage from the "old bank"?



    You shouldn't be given a tax break just because you were lucky enough to own your own hosue. Using your tax money to pay for your asset is no difference than simply not paying that tax and then using it to pay for your asset. I have worked for 10 years, I don't own a home but you want me to pay more tax than you because you own home?

    Right where to start where to start...the hyperbowl is in response to people who are kicking people who are already down and it straight I have given my circumstance a few times..I have no mortgage.

    Your comparison to taxes with a company does not hold water as a company declares bankrupcy and walks away and unfortunately the individual cannot.

    Also when people sold properties and made a profit was this profit not taxed..Before these people bought the property did they not pay stamp duty??? So when you take that away there really was not as much profit made as people make out.

    As for the you went in and got the loan..As I said before it takes 2 to tango its an agreement between 2 parties and at present 1 party is being crusified and cannot walk away and infact the other party the bank think its prudent to increase the interest rates...Do you think this is fair?

    And the gov being broke..well people who lost their jobs and cannot pay are also broke yet they cannot walk away from their obligation..Yet you seem to think that the gov should turn their back on an estimated 600k people who have active mortgages in neg equity. As I say should they also turn their back on the vested interest groups I listed like unmarried mothers?

    As I say one way or the other the tax payer will be picking up the tabs...I am trying to put together tangable ideas that cost less to me the tax payer

    Why should any increase in ECB be born on existing mortgages when the money was already lent to the banks at a rate lesser than that they are currently getting. As I say France and Germany have full term fixed. This should be forced on the banks that we own?


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    #533
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    fliball123 wrote: »
    The one fundamental issue with your bold is that it takes 2 to tango...it takes one to get the loan and one to give the loan

    From an individual mortgage point of view..what pain at present are the banks seeing from this individual deal that they fully participated in.

    In fact they are trying to fcuk over these people by increasing their interest rates...
    Depending on which set of numbers you believe there are either 85,000 mortgages or 93,000 mortgages currently not being paid at all or where less is being paid than was initially agreed. That is billions in additional financing the banks are effectively providing to mortgage holders. Interest rates are being increased for mortgage holders because borrowing rates are being increased. To not increase mortgage rates to match market borrowing rates would be fuсking over the taxpayer because that is who would have to make up the difference. There is no such thing any more as sticking it to the banks. We are the banks. The only thing up for discussion at this stage is how much help the taxpayer gives to mortgage holders and how that help is structured.


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    #534
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Monty Burnz wrote: »
    The interest rates are still unrealistically low. Banks can't borrow at less that 6% or so (the rate that the government is paying). Add on a margin of 1.5% and you have a standard variable rate of 7.5%.

    At some point, the rates charged to customers are going to have to match up to what it costs the banks to borrow. It's going to get a lot, lot messier yet I think.

    but these banks got the loans from the ECB at the rate of around 1/2%


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    #535
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    fliball123 wrote: »
    Your comparison to taxes with a company does not hold water as a company declares bankrupcy and walks away and unfortunately the individual cannot.
    Yes, they can, but personal bankruptcy is currently a very painful process and needs to be reformed.
    fliball123 wrote: »
    Yet you seem to think that the gov should turn their back on an estimated 600k people who have active mortgages in neg equity.
    600k people is bull**** as I already explained to you here.
    http://www.boards.ie/vbulletin/showthread.php?p=70690444#post70690444
    If you disagree please explain why and explain where the 600k number comes from.
    fliball123 wrote: »
    Why should any increase in ECB be born on existing mortgages when the money was already lent to the banks at a rate lesser than that they are currently getting.
    a) Because it is being borne by people who knowingly signed up to variable rate mortgages.
    b) Because the money was not borrowed at a lower rate. The money financing those mortgages today was borrowed at a much higher rate.


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    #536
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Unrealistic wrote: »
    Depending on which set of numbers you believe there are either 85,000 mortgages or 93,000 mortgages currently not being paid at all or where less is being paid than was initially agreed. That is billions in additional financing the banks are effectively providing to mortgage holders. Interest rates are being increased for mortgage holders because borrowing rates are being increased. To not increase mortgage rates to match market borrowing rates would be fuсking over the taxpayer because that is who would have to make up the difference. There is no such thing any more as sticking it to the banks. We are the banks. The only thing up for discussion at this stage is how much help the taxpayer gives to mortgage holders and how that help is structured.

    True but its fcuking over the taxpayer who have houses aswell when they raise them...and your last point is what I am trying to get is the best solution that is the least expensive to the tax payer...but thinking that burying your head in the sand and saying fecking ejjets bought a house they couldnt afford should be made pay...When the reality is..that this person who cannot pay will simply post the keys back and leave the country..I know a half dozen people who have done this...but hey at least we have more houses availabe to house the rest who default and decide to stay here


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    #537
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Unrealistic wrote: »
    Yes, they can, but personal bankruptcy is currently a very painful process and needs to be reformed.


    600k people is bull**** as I already explained to you here.
    http://www.boards.ie/vbulletin/showthread.php?p=70690444#post70690444
    If you disagree please explain why and explain where the 600k number comes from.


    a) Because it is being borne by people who knowingly signed up to variable rate mortgages.
    b) Because the money was not borrowed at a lower rate. The money financing those mortgages today was borrowed at a much higher rate.

    the 600k is an estimate for the end of the year.. house prices are continuing to dwindle which means the figure is going up on a daily basis. These figures do not bring into account people who have not paid for the first 6 months of being unable to pay. They also fail to bring in people who have gone interest only


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    #538
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    fliball123 wrote: »
    but these banks got the loans from the ECB at the rate of around 1/2%
    Let's say you took out a mortgage in 2006 and you opted for the five year fixed rate, which was say 2.5%. The bank financed this by borrowing on the wholesale market at 1.5% for five years. Those five years are up so the bank has to borrow new money to repay the money it initially borrowed to finance your mortgage. Nobody is lending at 1.5% now so the bank has to borrow at 6% from the government/taxpayer (who is only passing on the rate we are being charged by the ECB/IMF). That 6% is the current cost to the bank of financing your mortgage. So, with it's margin to cover risks and overhead, it needs to charge you 7% just to break even.


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    #539
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    fliball123 wrote: »
    but these banks got the loans from the ECB at the rate of around 1/2%
    You understand how banking works, right? You understand that they borrow short and lend long, and need to refinance their debts?

    Sorry, I just re-read that and it sounds very aggressive. :o But I think you can see the point I'm trying to make.


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    #540
    sarumite
    Registered Users Posts: 2,909 ✭✭✭sarumite


    fliball123 wrote: »
    Right where to start where to start...the hyperbowl is in response to people who are kicking people who are already down and it straight I have given my circumstance a few times..I have no mortgage.

    Yeah, and I remember people being "smug" and "kicking" me when I said I couldn't afford a mortgage and telling me how much their property was now worth....though all that is irrelevant to the discussion and gets in the way od actual debate

    Your comparison to taxes with a company does not hold water as a company declares bankrupcy and walks away and unfortunately the individual cannot.

    Yes they can declare bankruptcy. Within this thread I have advocated several times for bankruptcy reform to make it more appealing to those in need

    Also when people sold properties and made a profit was this profit not taxed..Before these people bought the property did they not pay stamp duty??? So when you take that away there really was not as much profit made as people make out.
    Capital gains only applies to profit made on the sale of the asset. Whether there is not as much profit is another discussion
    As for the you went in and got the loan..As I said before it takes 2 to tango its an agreement between 2 parties and at present 1 party is being crusified and cannot walk away and infact the other party the bank think its prudent to increase the interest rates...Do you think this is fair?
    The banks are broke...the people own the bank lost it all. Their shares are worth nothing. The banks are not increasing the interest rates, the ECB are.
    And the gov being broke..well people who lost their jobs and cannot pay are also broke yet they cannot walk away from their obligation..Yet you seem to think that the gov should turn their back on an estimated 600k people who have active mortgages in neg equity. As I say should they also turn their back on the vested interest groups I listed like unmarried mothers?

    I think the government shoudln't walk away....I think the government should change bankruptcy laws to make it easier for those who cannot afford to pay their mortgage and in negative equity to declare bankruptcy. Your vested interest groups included the vast majority of mortgage holders if I remember rightly.

    Why should any increase in ECB be born on existing mortgages when the money was already lent to the banks at a rate lesser than that they are currently getting. As I say France and Germany have full term fixed. This should be forced on the banks that we own?

    The agreement on a variable mortgage states that interest rates may go up or down. If you agreed to those terms, then thats why. If you are on a fixed rate, then they won't and shouldn't.


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    #541
    Unrealistic
    Registered Users Posts: 1,259 ✭✭✭Unrealistic


    fliball123 wrote: »
    and your last point is what I am trying to get is the best solution that is the least expensive to the tax payer...but thinking that burying your head in the sand and saying fecking ejjets bought a house they couldnt afford should be made pay...When the reality is..that this person who cannot pay will simply post the keys back and leave the country..I know a half dozen people who have done this...but hey at least we have more houses availabe to house the rest who default and decide to stay here
    Noble aims and I have said I'm after the same thing. I think the only difference is that I believe it is crucial that, in parallel with providing assistance, we get widespread acknowledgement of what really happened. You can't drive up a bubble without willing buyers. If people get bailed out without acknowledging their partial responsibility for getting themselves into the mess in the first place then there is no lesson learned and, even worse, there is the wrong lesson learned. We will only increase the likelihood of future bubbles and crashes because people will think that even if they overpay in the future they will get bailed out. There would be even less incentive to take sensible decision.


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