Mortgage debt plan 'will save economy'

Richard tea · 21-08-2011 12:05PM

They are discussing this issue on newstalk. Paul sommerville, constantin Gurdgive and others. Download the podcast if you miss it. Well worth listening to.

Predalien · 21-08-2011 12:07PM

aligator_am wrote: »

And if there is some form of debt forgiveness, who foots the bill?

If the amount required is €6bn, where does that cash come from, the IMF?

Wonder how much the interest will accrue to on that.

How about we default on €6bn of bank bonds we're paying back that we don't have to?

Richard tea · 21-08-2011 12:07PM

aligator_am wrote: »

And if there is some form of debt forgiveness, who foots the bill?

If the amount required is €6bn, where does that cash come from, the IMF?

Wonder how much the interest will accrue to on that.

I foot the bill. You foot the bill. We all foot the bill.
Havent a breeze where the cash comes from.
But doing nothing will only make it worse.

aligator_am · 21-08-2011 12:09PM

Predalien wrote: »

How about we default on €6bn of bank bonds we're paying back that we don't have to?

Isn't that something similar to what Iceland did? they seem to be getting back on their feet from what I've heard.

aligator_am · 21-08-2011 12:14PM

Richard tea wrote: »

I foot the bill. You foot the bill. We all foot the bill.
Havent a breeze where the cash comes from.
But doing nothing will only make it worse.

I know what you're saying, but I think what may happen is that those who have their mortgage debt forgiven could up sticks and emigrate thus leaving the bill with the rest of us.

I know I'm being cynical but I think it's a fair point.

10000maniacs · 21-08-2011 12:14PM

Predalien wrote: »

People seem to be focused on the "why should my neighbour get something free?" argument, the bigger picture is a rescue of the domestic Irish economy, debt forgiveness is one of the necessary measures to provide some stimulus, it will be open to abuse but with proper structure and planning that can be minimised.

WHY BLEEDING NOT.:mad:
I could have got a decent sized house if I got out a 110% mortgage in 2005.
Instead I opted for a modest sized house and a 65% mortgage. Why should I be the one paying to allow the fecker who took out the 110% mortgage to stay in his massive house. :mad::mad:

Predalien · 21-08-2011 12:14PM

aligator_am wrote: »

Isn't that something similar to what Iceland did? they seem to be getting back on their feet from what I've heard.

Yeah they didn't pay back the unsecured bonds, there were haircuts for the rest. They weren't weighed down by the euro though, or the ridiculous proposition that the "markets" won't like us if we default on bank debt and that we'll never be able to borrow again if we do. The sooner we default on the bank debt the sooner we can borrow normally imo.

MysticalRain · 21-08-2011 12:19PM

This is of course the same Dr Gurdgiev who happens to be in negative equity with his own home. Funny how libertarians like Dr Gurdgiev can call for state intervention when it suits their own personal needs.

I think a better idea than debt forgiveness would be debt restructuring. Where a 30 year mortgage is turned into a 40 or 60 year mortgage to make it more manageable. That would make things easier for the homeowner or property investor, but would prevent them from abdicating their responsibility to pay back the money they owe.

CiaranC · 21-08-2011 12:19PM

10000maniacs wrote: »

It shouldn't be put in place at all.
If there has to be debt forgiveness, it should be a percentage (maybe 30% of the remaining loan) down the line for EVERYBODY who took out a mortgage on a home in the last 10 years. That will stop the moral hazard argument.

lol, what about the people who didnt take out a mortgage? What do they get?

Richard tea · 21-08-2011 12:20PM

aligator_am wrote: »

I know what you're saying, but I think what may happen is that those who have their mortgage debt forgiven could up sticks and emigrate thus leaving the bill with the rest of us.

I know I'm being cynical but I think it's a fair point.

Tis a fair point indeed. As mentioned by others. Any forgiveness/restructuring of mortgage should come hand in hand with strict rules with harsh penalties for people trying to scam the system.

Have a quick read through this page. Its a start I would say.
http://www.davidmcwilliams.ie/2011/05/16/mortgage-crisis-my-mad-solution

Predalien · 21-08-2011 12:20PM

10000maniacs wrote: »

WHY BLEEDING NOT.:mad:
I could have got a decent sized house if I got out a 110% mortgage in 2005.
Instead I opted for a modest sized house and a 65% mortgage. Why should I be the one paying to allow the fecker who took out the 110% mortgage to stay in his massive house. :mad::mad:

Your anger is fair but we need some domestic stimulus, this will give more money to a chunk of middle class folk and boost all areas, everyone will benefit from it in the long run. The only other option is to leave the eurozone and maybe the EU and balance our budget over about two years. Either that or we keep going the way we are and slowly sink further with no hope of economic recovery.

Biffo The Bare · 21-08-2011 12:22PM

Predalien wrote: »

Your anger is fair but we need some domestic stimulus, this will give more money to a chunk of middle class folk and boost all areas, everyone will benefit from it in the long run. The only other option is to leave the eurozone and maybe the EU and balance our budget over about two years. Either that or we keep going the way we are and slowly sink further with no hope of economic recovery.

I will tell you if this deal comes in there will be civil unrest.

Predalien · 21-08-2011 12:23PM

MysticalRain wrote: »

This is of course the same Dr Gurdgiev who happens to be in negative equity with his own home. Funny how libertarians like Dr Gurdgiev can call for state intervention when it suits their own personal needs.

I think a better idea than debt forgiveness would be debt restructuring. Where a 30 year mortgage is turned into a 40 or 60 year mortgage to make it more manageable. That would make things easier for the homeowner or property investor, but would prevent them from abdicating their responsibility to pay back the money they owe.

It's forgiveness for those who can't make the full repayments, individuals financial situations will have to be taken into account.

They'd have to stay working til their mid 80's or 90's.

Flex · 21-08-2011 12:24PM

Predalien wrote: »

Your anger is fair but we need some domestic stimulus, this will give more money to a chunk of middle class folk and boost all areas, everyone will benefit from it in the long run. The only other option is to leave the eurozone and maybe the EU and balance our budget over about two years. Either that or we keep going the way we are and slowly sink further with no hope of economic recovery.

How will it provide a stimulus? Youll depress demand in the economy even more as the government implements levys or initiates further tax increases to come up with the money to pay peoples mortgage for them. "Debt Forgiveness" is a (deliberately) misleading name for this, the debt isnt being wrote off and forgotten about, the beneficiaries of this scheme will simply be forcing their neighbours to pay their mortgage for them (reducing their neighbours disposable income and damaging consumer confidence throughout the whole economy in the process).

Richard tea · 21-08-2011 12:26PM

Biffo The Bare wrote: »

I will tell you if this deal comes in there will be civil unrest.

Not likely Biffo. Unless by civil unrest you mean a 2 hour march in the city centre. A few people getting bashed over the head by the garda and then everyone goes home and watches the X factor

Predalien · 21-08-2011 12:27PM

Biffo The Bare wrote: »

I will tell you if this deal comes in there will be civil unrest.

There should be civil unrest at the continuation of the policy of paying back bonds we have no obligation to. Oh and Ireland doesn't do civil unrest sadly.

MysticalRain · 21-08-2011 12:28PM

Predalien wrote: »

They'd have to stay working til their mid 80's or 90's.

I am beginning to think I will end up working until my 80's and 90's myself if I am expected to pay off other peoples mortgages for them.

aligator_am · 21-08-2011 12:28PM

Richard tea wrote: »

Tis a fair point indeed. As mentioned by others. Any forgiveness/restructuring of mortgage should come hand in hand with strict rules with harsh penalties for people trying to scam the system.

Have a quick read through this page. Its a start I would say.
http://www.davidmcwilliams.ie/2011/05/16/mortgage-crisis-my-mad-solution

Interesting article there, thanks for the link

galwayrush · 21-08-2011 12:31PM

We'll all be working into our 80's as will our kids and grandkids to pay the poor :rolleyes:gambling bondholders who gambled and lost but thanks to our bailout deal, but still win.

Amhran Nua · 21-08-2011 12:31PM

The only debt forgiveness that is possible is if upstream lenders do the forgiving, that's the ECB and bond holders and so on. If they decide to cut off a lump of what the banks owe, and the banks in turn decide to reduce outstanding mortgages a bit, then fair enough.

Making the taxpayer hand over money for someone's bad investment is never going to work. Nobody else is going to pay your mortgage for you, full stop.

Of course its ironic that Fianna Fail did exactly that for the banks with their disastrous guarantee, and followed it up with NAMA which is still using taxpayer money to try and keep property prices high (and failing).

galwayrush · 21-08-2011 12:35PM

Amhran Nua wrote: »

The only debt forgiveness that is possible is if upstream lenders do the forgiving, that's the ECB and bond holders and so on. If they decide to cut off a lump of what the banks owe, and the banks in turn decide to reduce outstanding mortgages a bit, then fair enough.

Making the taxpayer hand over money for someone's bad investment is never going to work. Nobody else is going to pay your mortgage for you, full stop.

Of course its ironic that Fianna Fail did exactly that for the banks with their disastrous guarantee, and followed it up with NAMA which is still using taxpayer money to try and keep property prices high (and failing).

Nama is working very well in another aspect it was intended for, a builder who ought to be bankrupt, as they would in any other country, can now live in a very comfortable lifestyle with a salary from NAMA ( up to 250K a year) to run their failure company on behalf of NAMA.

Predalien · 21-08-2011 12:36PM

Amhran Nua wrote: »

The only debt forgiveness that is possible is if upstream lenders do the forgiving, that's the ECB and bond holders and so on. If they decide to cut off a lump of what the banks owe, and the banks in turn decide to reduce outstanding mortgages a bit, then fair enough.

They don't have to do any forgiving, many of the bonds were unsecured and don't have to be repaid, normal process for the rest is for a haircut to be applied, there are risks attached to lending and the normal rules should apply despite our government's ludicrous guarantee.

Amhran Nua · 21-08-2011 12:40PM

galwayrush wrote: »

Nama is working very well in another aspect it was intended for, a builder who ought to be bankrupt, as they would in any other country, can now live in a very comfortable lifestyle with a salary from NAMA ( up to 250K a year) to run their failure company on behalf of NAMA.

Yeah, and they are promising to repay negative equity out of taxpayer funds. Whatever else they may be doing, that's grounds to disband the entire farce.

Predalien wrote: »

They don't have to do any forgiving, many of the bonds were unsecured and don't have to be repaid, normal process for the rest is for a haircut to be applied, there are risks attached to lending and the normal rules should apply despite our government's ludicrous guarantee.

Agreed completely, I'm just pointing out that if some posters want debt forgiveness without burdening the taxpayer, they may direct their petition to Jean Claude Trichet.

If they don't mind burdening the taxpayer, they can go get knotted.

/taxpayer

drunkmonkey · 21-08-2011 12:58PM

Predalien wrote: »

Oh and Ireland doesn't do civil unrest sadly.

lol, soft dubs might not but there's rebel blood running through the rest of us!!

Sam Vimes · 21-08-2011 01:06PM

Predalien wrote: »

People seem to be focused on the "why should my neighbour get something free?" argument, the bigger picture is a rescue of the domestic Irish economy, debt forgiveness is one of the necessary measures to provide some stimulus, it will be open to abuse but with proper structure and planning that can be minimised.

If the government is going to spend money it doesn't have to put stimulus into the economy it should be distributed equally, not ring fenced for people who made bad investment decisions.

Once we've all been given our stimulus money those people who can't manage their debts can use their share to reduce their debts if they want.

CiaranC · 21-08-2011 01:11PM

drunkmonkey wrote: »

lol, soft dubs might not but there's rebel blood running through the rest of us!!

Where was your protest when they signed our sovereignty over the the EU/IMF?

Come off it, there will be no civil unrest.

And lets stop pretending we are all in this together. There are no consequences for the bankers, developers and politicians who caused this, so its every man for himself. Ill be claiming my tax back on leaving the country shortly, the rest of you can pay for this bank debt and each others mortgages.

Amhran Nua · 21-08-2011 01:21PM

CiaranC wrote: »

Where was your protest when they signed our sovereignty over the the EU/IMF?

Ireland will have lost sovereignty when foreign tanks roll down Grafton Street without getting blown to kingdom come, and every major population centre is garrisoned with foreign troops. Until such time no sovereignty has been lost, unless by that you mean the normal tangle of trade and diplomatic agreements that every country operates under in order that they don't end up like North Korea.

sollar · 21-08-2011 02:27PM

10000maniacs wrote: »

It shouldn't be put in place at all.
If there has to be debt forgiveness, it should be a percentage (maybe 30% of the remaining loan) down the line for EVERYBODY who took out a mortgage on a home in the last 10 years. That will stop the moral hazard argument. This way it will stop the "can't pay won't pay" scenario.

That is the only way i can see it work.

What we can't have is the stupidest getting debt forgiven and then being free to spend their new found disposable income in the economy. And the prudent still struggling to pay their mortgage yet still having next to no disposable income to spend in the economy.

This will cause outrage.

Kidchameleon · 21-08-2011 02:33PM

drunkmonkey wrote: »

As someone who didn't buy into the property against everyones good advice i've a big problem with the debt forgiveness bull****, these people made stupid investments they could not afford, repossess the houses, have a fire sale, let the market hit it's real bottom and allow people like me to own a home at a reasonable affordable price.
If I went out and bought a new ferrari and couldn't afford the repayments the car would be repossessed, that's the way loans work. We can't start changing the game because of peoples stupid mistakes and before anyone says well it wasn't their fault it was the banks, nobody put a gun to anybody's head, if you bought a 3 bed semi for 500k or an apartment for 400k your a feckin idiot and deserve to learn a lesson and not at my expense.

Families don't need Ferrari's to live in. They need houses.

mikemac · 21-08-2011 02:38PM

Haven't heard such nonsense since FG wanted to compensate Eircom investors who lost money

I saved my money so if this goes ahead am I getting one of the empties for free?
Well, we're both getting free equity after all

People look at bankers and billions but when you hear billions so many times you can't realy visualize it.
But the McDonaghs do the street who get their mortgage written down, people can see this and will be furious.
This scheme will cause more unrest then any bank bailout

Mortgage debt plan 'will save economy'

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