Huge negative equity on apartments.

Gauss · 01-10-2012 10:58AM #1

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

starbelgrade · 01-10-2012 11:00AM

You can hand in your keys to the bank, but you'll still owe them the money.

Valetta · 01-10-2012 11:01AM

You'd still owe all the money, just would have nowhere to live.

Immaculate Pasta · 01-10-2012 11:02AM

Your argument is quite clearly flawed, sir.

seamus · 01-10-2012 11:03AM

Handing the keys isn't an option as the debt isn't solely tied to the property.

Once the property has been sold, the bank will chase you for the balance of the mortgage, as they are legally entitled to do.

In fact, staying in the property is the better option since the bank are subject to all sorts of restraint in terms of how they can chase you for the money.

If you move out and hand back the keys, the property becomes an investment property and the bank are free to haul you over coals to get their money back.

However, it is a long-term issue which needs dealing with. Once it becomes apparent that there is no salvation forthcoming from negative equity a lot of people will just give two fingers to the banks and move abroad or stop paying altogether.

Gauss · 01-10-2012 11:06AM

Valetta wrote: »

You'd still owe all the money, just would have nowhere to live.

How about just rent another property and don't pay them back.

marketty · 01-10-2012 11:06AM

What's ridiculous now about a 400k mortgage for a flat that wasn't ridiculous 5 years ago?

SEPT 23 1989 · 01-10-2012 11:07AM

I would head to the shores of the United Kingdom if i was in that position

minidazzler · 01-10-2012 11:07AM

Gauss wrote: »

How about just rent another property and don't pay them back.

You signed a legally binding agreement to pay them back. They will bring you to court and you will be told to do so.

Menas · 01-10-2012 11:11AM

Even if the bank did allow everyone to just hand back the keys then the debt would essentially be transfered to the taxpayer and the country would go down the swannie.

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

aidan24326 · 01-10-2012 11:14AM

minidazzler wrote: »

You signed a legally binding agreement to pay them back. They will bring you to court and you will be told to do so.

You could still say no though. I'm not sure what legal repercussions there would be. Would jail be a possibility? Does anyone know of someone going to jail for refusing to pay their mortgage?

If there was no danger of going to jail I would move out, hand over the keys and simply refuse to pay it. There needs to be a debt sharing structure put in place. The banks should be forced to take on half of the negative equity, since they were instrumental in creating the mess that we now have.

Overthrow · 01-10-2012 11:15AM

Why should you care about the current market price of the place if you were planning on living there for the rest of your life? If you saw it as an investment property then you've nobody to blame but yourself for making a bad investment decision.

Gauss · 01-10-2012 11:15AM

marketty wrote: »

What's ridiculous now about a 400k mortgage for a flat that wasn't ridiculous 5 years ago?

It was ridiculous 5 years ago? People were socially conditioned to think it wasn't.

seamus · 01-10-2012 11:17AM

Trigger Happy wrote: »

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

Off-topic, but the actual source of the word and the "death" reference refers to the death of the obligation. A mortgage is an obligation which has a definite end - either when the debt is repaid or the property is repossessed. The idea that it only ends when you die is in fact the exact opposite of what "mortgage" intends.

I'm guessing the word comes from a time when a creditor (i.e. a landlord) could indefinitely hold an obligation over a debtor and/or their family no matter how much they repaid.

The Irish implementation of mortgage debt flies in the face of exactly what a mortgage is supposed to be, if implemented correctly all mortgages would be cleared by simply handing back the keys.

Youssef Chippo · 01-10-2012 11:19AM

SEPT 23 1989 wrote: »

I would head to the shores of the United Kingdom if i was in that position

They have banks and police there too you know

cournioni · 01-10-2012 11:20AM

Enough of this equity bollocks. If someone takes out a mortgage of €400k to buy an apartment then they have to pay back €400k. If you are buying to "invest", then you lost the bet, tough ****. If you are spending €400k to live in it then you're in the same situation as you were in years ago when you bought the apartment, you have to pay it back.

cloptrop · 01-10-2012 11:20AM

Trigger Happy wrote: »

Even if the bank did allow everyone to just hand back the keys then the debt would essentially be transfered to the taxpayer and the country would go down the swannie.

Mortgage by definition is a 'death debt'. Ie, you can only get out of it by paying it back or by dying.

Jesus man dont be offerin suicide advice theres people at the end of their tether here.
Stop paying wait till you go to court . Dont pay get repossessed. Still dont pay get a letter in your door every week for ever.
Banks are gaurenteed by government . If nobody pays we need another bailout . Nama gets loads more houses pushing prices down further . Taxes increase to pay off second bailout .
Or you could just keep to your agreement of paying for your stupid investment . Like seriously400 000 for an apartment beside darndale . You kinda have nobody else to blame but you.

Ghandee · 01-10-2012 11:21AM

Do debts cross international borders?

Emigrate if they don't.

ejmaztec · 01-10-2012 11:23AM

seamus wrote: »

Off-topic, but the actual source of the word and the "death" reference refers to the death of the obligation. A mortgage is an obligation which has a definite end - either when the debt is repaid or the property is repossessed. The idea that it only ends when you die is in fact the exact opposite of what "mortgage" intends.

I'm guessing the word comes from a time when a creditor (i.e. a landlord) could indefinitely hold an obligation over a debtor and/or their family no matter how much they repaid.

The Irish implementation of mortgage debt flies in the face of exactly what a mortgage is supposed to be, if implemented correctly all mortgages would be cleared by simply handing back the keys.

Yes, it would be handy handing over the keys to clear a €400k mortgage and buying the property back for €50k.:pac:

Gauss · 01-10-2012 11:23AM

cournioni wrote: »

Enough of this equity bollocks. If someone takes out a mortgage of €400k to buy an apartment then they have to pay back €400k. If you are buying to "invest", then you lost the bet, tough ****. If you are spending €400k to live in it then you're in the same situation as you were in years ago when you bought the apartment, you have to pay it back.

Yes I agree, I still wouldn't pay it back though.

SEPT 23 1989 · 01-10-2012 11:24AM

Youssef Chippo wrote: »

They have banks and police there too you know

they also have a progressive bankruptcy system that allows people to move on with their lives

cournioni · 01-10-2012 11:24AM

Gauss wrote: »

Yes I agree, I still wouldn't pay it back though.

Why not?

keithclancy · 01-10-2012 11:25AM

Ghandee wrote: »

Do debts cross international borders?

Emigrate if they don't.

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

markpb · 01-10-2012 11:28AM

keithclancy wrote: »

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

I don't think they issue bench warrants on foot of debts any more, not since they changed the law so you can't be incarcerated for unpaid debts. Could be wrong though.

Ghandee · 01-10-2012 11:30AM

keithclancy wrote: »

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

I reckon their should be a lot more issued to some politicians and bankers before they issue one for a man who walked away from a 400k mortgage.

Lando Griffin · 01-10-2012 11:31AM

Could be worse. You could be in an apartment block with only half the units occupied. Then again with so many on the housing list one would expect that such units be filled and reducing the list. Then at least you would be living in a vibrant exclusive apartment block like what was in the glossy brouchures.

Gauss · 01-10-2012 11:37AM

cournioni wrote: »

Gauss wrote: »

Yes I agree, I still wouldn't pay it back though.

Why not?

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

2rkehij30qtza5 · 01-10-2012 11:39AM

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

I am one of these people.
I have the apartment rented out as I don't live in the same city.
I can't just hand back the keys to the bank as it would mean I'd never get a mortgage again the future for a house I want to make my 'forever' house. I'm only in my early 30's and have a young family so I can't jeopardise my future or my families like that. It's awful though....I basically work to pay the shortfall in the mortgage every month.

2rkehij30qtza5 · 01-10-2012 11:40AM

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

I am one of these people. €425k mortgage and apartment worth about €150k at most if I am lucky.
I have the apartment rented out as I don't live in the same city.
I can't just hand back the keys to the bank as it would mean I'd never get a mortgage again the future for a house I want to make my 'forever' house. I'm only in my early 30's and have a young family so I can't jeopardise my future or my families like that. It's awful though....I basically work to pay the shortfall in the mortgage every month.

cournioni · 01-10-2012 11:44AM

Ghandee wrote: »

I reckon their should be a lot more issued to some politicians and bankers before they issue one for a man who walked away from a 400k mortgage.

Unfortunately, if you sign your name to promise to pay something back, you have to pay it back Ghandee. If everyone in the country walked away from their mortgages we would be in some state. You can blame the inflated prices and reckless lending on whoever you want, but at the end of the day if you sign your name away to something that you cannot pay back then you should be held accountable.

I am in my late 20's, I have never taken a loan out in my life, because I believe that if you don't have it, then you cannot spend it. A lot of people in this country saw loans as free money and we are all now paying the price for it. That is not letting the banks, developers or the government off the hook because they are equally to blame, but to say that people are blameless is completely wrong.

cournioni · 01-10-2012 11:46AM

Gauss wrote: »

It's a waste of time, money and hardworking. I know it's immoral but it's also human nature not to want to waste your life paying back debt.

You take on the debt then you have to pay it back. If you couldn't see the risk in taking out a loan then that is your problem, but don't make the problem mine just because of your mistakes.

Huge negative equity on apartments.

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