Huge negative equity on apartments.

Red21 · 01-10-2012 11:46AM

If you paid 400k for a place in 2007, even at a good rate that's roughly €2000+ per month for 25 years, had a person been a few years younger and decided to stay at home for a few years saving their €2000 they'd have enough money to buy the same appartment within 4years and be dept free.
I'd be really pissed-off if I got stung like this, having so many pissed-off people cannot be good for society.

Duckjob · 01-10-2012 11:47AM

starbelgrade wrote: »

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

Apparently it only works if you march in and "throw the keys back at them". So I've heard anyway...:pac:

JohnMarston · 01-10-2012 11:49AM

I dunno what would be going through your head buying an apartment for that ridiculous sum. With the repayments you've essentially handcuffed to the place for life.

Thanks but i think i'll keep renting. Not like i can take the place with me when i die

marketty · 01-10-2012 11:49AM

Gauss wrote: »

People were socially conditioned to think it wasn't.

Not me.
If you were in an average job and borrowing 10 times your annual income over 35-40 yrs,with very little if any deposit, for a box that you didn't plan on living in for the rest of your life, you were either very naive about basic economics or, as was often the case, you were trying to get 'on the ladder' and sell the place for a profit after a couple of years because of course the prices were only going to go up, in which case you were part of the reason things got so mental. Now I'm not saying the banks weren't responsible to some extent, of course they were, they engaged in some very dodgy lending practices and advertising to feed the frenzy, there is no arguing that. Unfortunately people got stung and stung big time when the **** hit the fan, but this idea that 'the banks' should have to absorb the losses just isn't going to work because we as a nation will end up taking on this debt, and we have enough problems as it is.

Ghandee · 01-10-2012 11:53AM

cournioni wrote: »

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.

Don't get me wrong, I agree ref the mortgage taken out, it should be paid back (you signed your name on it after all)

Im in negative equity (as are most of the country) I bought in 06 so the height of the boom, can't really complain though, we had to live somewhere, and obviously thought the price we were paying was worth it at the time.

I do however have an issue with the bank guarantee deal, and unsecured bonds being paid back. IMO, the the public (Irish tax payers) have been shouldered with a debt they never signed for. Unborn children will be paying back debt in years to come they had nothing to do with.

A few overpaid guys at the top, refused to share the wealth but have no problem sharing the debt out when the economy took a nose dive.

Overthrow · 01-10-2012 11:56AM

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.

Jesus. What did you think you were signing up for?

Boombastic · 01-10-2012 12:00PM

Do all the people who didn't buy now get a free house, or can we choose to take the €400,000 cash?

cournioni · 01-10-2012 12:12PM

Ghandee wrote: »

Don't get me wrong, I agree ref the mortgage taken out, it should be paid back (you signed your name on it after all)

Im in negative equity (as are most of the country) I bought in 06 so the height of the boom, can't really complain though, we had to live somewhere, and obviously thought the price we were paying was worth it at the time.

I do however have an issue with the bank guarantee deal, and unsecured bonds being paid back. IMO, the the public (Irish tax payers) have been shouldered with a debt they never signed for. Unborn children will be paying back debt in years to come they had nothing to do with.

A few overpaid guys at the top, refused to share the wealth but have no problem sharing the debt out when the economy took a nose dive.

Totally agree with all of that. It's just a pity that others cannot/refuse to see it that way. It is a complete mess but we all have to work together to make things right. That goes for everybody, from the people on €1m+ per year to the people on €188 per week.

01-10-2012 12:15PM

I think I'll rack up a load of debt on my credit card then hand it back to the bank and say "see ya"

Akrasia · 01-10-2012 12:21PM

marketty wrote: »

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

Hey, that apartment probably had LEDs in the bath that Changed Colour!!

totally worth the money

Gauss · 01-10-2012 12:23PM

cournioni wrote: »

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.

I agree, I'm not in negative equity. But if I found myself in such a scenario wher the negative equity is huge I wouldn't pay it back. I know it's wrong just like if I found a million euro it woul be wrong to keep it, but I still would.

Gauss · 01-10-2012 12:24PM

Overthrow wrote: »

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.

Jesus. What did you think you were signing up for?

I don't have a mortgage.

markpb · 01-10-2012 12:25PM

cournioni wrote: »

Unfortunately, if you sign your name to promise to pay something back, you have to pay it back Ghandee.

I agree with you but why do you think countries have bankruptcy legislation?

Slurryface · 01-10-2012 12:26PM

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?

And be pursued to the ends of the earth by the bank? eh , no.

Boombastic · 01-10-2012 12:38PM

Akrasia wrote: »

Hey, that apartment probably had LEDs in the bath that Changed Colour!!

totally worth the money

decking, I hope it had decking, yeah!

cournioni · 01-10-2012 12:40PM

markpb wrote: »

I agree with you but why do you think countries have bankruptcy legislation?

You're right, I'm sure you understand what I mean though, you have to make every attempt to pay back what you owe. You can not just drop it.

Brain Stroking · 01-10-2012 12:51PM

markpb wrote: »

I agree with you but why do you think countries have bankruptcy legislation?

To deal with people who are essentially insolvent. I dont think the point here is to do with those that simply cannot pay but more rather to do with those who wont pay.

If you take a mortgage you pay. Simple. Blaming banks and bondholders when you took out a 400k loan for an apartment is ridiculous in my opinion.

Larbre34 · 01-10-2012 01:03PM

Ive done some work with Banks on their internal systems, mainly due to the fact they are shedding staff like billyo

What they are all doing is joining up the debt recovery effort across their mortgages, personal finance, credit card, leasing and everything else. Obviously the largest debt gets first call, but if you get a judgement against you, it will handcuff your ability to operate your life for a long time, unless you find a way to avoid all transactions.

It might be very tempting to do a runner or in effect post back the keys, but youre far better off doing a deal on your combined debt and at least being sure of what youre payments will be. It might require a deal of humility to make the first approach, but dont be shy about playing up the seriousness of your circumstances, youd be surprised how manageable a deal you could get, otherwise youll be looking over your shoulder and getting hassled for a very long time

Rigol · 01-10-2012 01:09PM

im with the op on this one. hand in the keys, declare bankruptcy, head abroad.
Let the state and bank do its worst...whatever that is it can't be much worse than sweating your life away for an apartment at 1/4 value.

P.C. · 01-10-2012 01:24PM

aidan24326 wrote: »

There needs to be a debt sharing structure put in place. .

No thanks.
I do not want to share your debt.

Kidchameleon · 01-10-2012 01:29PM

What about people who baught during the boom with the intention of trading up? Like myself, im perfectly able to pay the loan but to sell and move to a better house is impossible... Is there anything the gov / banks will do to help?

enricoh · 01-10-2012 01:31PM

if it was me - stop paying, throw in keys n get a new phone no. if its tight now and interest rates are so low imagine what its gonna be like when rates go up.

sod them, u've bad credit rating - so what, u'll be able to have a life. a mate of mine age 40 recently had a heart attack - pure stressed out over cash, mortgage etc

cloptrop · 01-10-2012 01:33PM

Kidchameleon wrote: »

What about people who baught during the boom with the intention of trading up? Like myself, im perfectly able to pay the loan but to sell and move to a better house is impossible... Is there anything the gov / banks will do to help?

No . You made the gamble and failed really dude .

ncmc · 01-10-2012 01:45PM

Kidchameleon wrote: »

What about people who baught during the boom with the intention of trading up? Like myself, im perfectly able to pay the loan but to sell and move to a better house is impossible... Is there anything the gov / banks will do to help?

Wasn't there some talk a while back about banks doing mortgages allowing people on negative equity to trade up to a larger home and take some of their negative equity with them? It sounds like a recipe for disaster though and I presume it would depend on how much negative equity you are in.

I do feel sorry for people stuck in inadequate apartments whose situation has changed, I know a couple who are in a one bed apartment and have just had their second child. They didn't buy to sell quickly and make a fast buck, but they did think they'd be able to trade up when the time came.

Snowie · 01-10-2012 01:49PM

Maybe in the future these people who go spending 400,000 on an apartment may have some for sight and re think paying that for them apartment.
I've no sympathy for any one that pays that much for an apartment utter stupidity.... All because of the age old irish attitude get your self some property...

Boombastic · 01-10-2012 01:50PM

Rigol wrote: »

im with the op on this one. hand in the keys, declare bankruptcy, head abroad.
Let the state and bank do its worst...whatever that is it can't be much worse than sweating your life away for an apartment at 1/4 value.

But what if 25 years the property is worth twice what they paid. This short term thinking is a lot of the problem

ncmc wrote: »

........
I do feel sorry for people stuck in inadequate apartments whose situation has changed, I know a couple who are in a one bed apartment and have just had their second child. They didn't buy to sell quickly and make a fast buck, but they did think they'd be able to trade up when the time came.

Sorry that's their own problem, they knew they're living situation, they made the decision to have more children

Brain Stroking · 01-10-2012 01:56PM

Rigol wrote: »

im with the op on this one. hand in the keys, declare bankruptcy, head abroad.
Let the state and bank do its worst...whatever that is it can't be much worse than sweating your life away for an apartment at 1/4 value.

Yup and then complain about the politicians screwing the country :rolleyes:

Grayson · 01-10-2012 01:58PM

Actually, the only people I feel sorry for are families at the bottom of the property ladder. People who bought a small apt thinking they could possibly move up in 5-10 years. They still bought into the whole bubble mentality but not as bad as the single 20 somethings who purchased huge apartments because they didn't want to feel left out or because it was a status thing.

2rkehij30qtza5 · 01-10-2012 02:17PM

Grayson wrote: »

Actually, the only people I feel sorry for are families at the bottom of the property ladder. People who bought a small apt thinking they could possibly move up in 5-10 years. They still bought into the whole bubble mentality but not as bad as the single 20 somethings who purchased huge apartments because they didn't want to feel left out or because it was a status thing.

This is exactly where we are.
Family with two small kids. Living in a rented house and renting out the apartment we paid €450k for but is worth €150k at most. Easy to say hand back keys but longterm that leaves us in a worse position...still owing money and stopping ourselves from ever being able to get a mortgage for a family home in the future.
We bought the apartment thinking it will be fine for now (start of 2006) and when we have kids we will sell it and upgrade. With the recession we have had to move to another city but rent out the apartment now, which comes with its own headaches.
It's soul destroying...don't know how we will ever pay off the debt and be able to buy a family home and give stability to our kids...ie not have to move from house to house every few years. I get very upset thinking about it. We have to pay €1000 a month on top of the rental income to meet the mortgage and we have just enough to buy clothes, food etc. then. No luxuries whatsoever...and we have good jobs thank God. But our standard of living would be good..we would be able to take an annual holiday etc if we didn't have to fork out on the apartment.

Guy:Incognito · 01-10-2012 03:12PM

Gauss wrote: »

I agree, I'm not in negative equity. But if I found myself in such a scenario wher the negative equity is huge I wouldn't pay it back. I know it's wrong just like if I found a million euro it woul be wrong to keep it, but I still would.

Are you looking to sell? What difference does negative equity make if your not?

If it makes you feel better, I'll tell you the house your going to live in for the rest of your life is worth €1m. Shazam, no more negative equity. Not that it matters what the book value of your house is if your just living in it anyway,

Huge negative equity on apartments.

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