AIB in payout Bonanza for mortgage defaulters

Zamboni · 12-03-2014 11:27AM #1

AIB have begun offering taxpayers money to people who fall into arrears on their property.
One lucky couple just got €150k in this new offer from the state owned bank.

The couple who can't be named for legal reasons (because they know the bank manager probably) are thrilled with the windfall and have been rubbing it in their prudent neighbours faces.

http://www.rte.ie/news/2014/0312/601666-aib-debt-writedown/

Avail of this offer now - stop paying your mortgage!

Terms and Conditions
This offer is not available if you were unfortunate enough to take out your mortgage with a bank that hasn't been taken over by the taxpayer.

everdead.ie · 12-03-2014 11:33AM

Zamboni wrote: »

AIB have begun offering taxpayers money to people who fall into arrears on their property.
One lucky couple just got €150k in this new offer from the state owned bank.

The couple who can't be named for legal reasons (because they know the bank manager probably) are thrilled with the windfall and have been rubbing it in their prudent neighbours faces.

http://www.rte.ie/news/2014/0312/601666-aib-debt-writedown/

Avail of this offer now - stop paying your mortgage!

Terms and Conditions
This offer is not available if you were unfortunate enough to not take out your mortgage with a bank that hasn't been taken over by the taxpayer.

In reality the bank is probably taking a pragmatic view a mortgage taken out for 400,000 on a house which may be valued at less than the 250,000 mortgage they now have to repay so they have determined the couple can repay 250,000 and they don't have to deal with selling the property for less than that.

A lucky couple though.

12-03-2014 11:34AM

Have they had to give up the tracker mortgage?

How had this affected their credit rating?

What other restriction's have been put on them.

While it is lucky for them, I think banks are just getting real with the fact that they may never see the money form some mortgage's they advanced during the boom years.

RichardoKhan · 12-03-2014 11:38AM

The moral of this story.........next housing boom shoot for the moon. Get the semi d 4 bed or stand alone with one acre & just wait for the bust. Unjust & ridiculous.......would have been far better wiping 25/30% of value everyone's mortgages post 2001 or so.

everdead.ie · 12-03-2014 11:43AM

RichardoKhan wrote: »

The moral of this story.........next housing boom shoot for the moon. Get the semi d 4 bed or stand alone with one acre & just wait for the bust. Unjust & ridiculous.......would have been far better wiping 25/30% of value everyone's mortgages post 2001 or so.

That would bankrupt the bank completely....

keith16 · 12-03-2014 11:44AM

I would also like some free money.

keeponhurling · 12-03-2014 11:44AM

I'm confused, is this bonanza presented by Marty Whelan or by Ronan Collins?

vicwatson · 12-03-2014 11:45AM

I don't know what a tracker mortgage is

P_1 · 12-03-2014 11:49AM

Sensationalist much?

Right from my reading of things, as well as the mortgage, the couple concerned also owe quite a considerable amount on their credit cards. AIB would presumably make more from the interest on the credit cad debt than they would on the mortgage. It seems that given the finances concerned it is a case of one or the other being able to be paid back so AIB have taken the business decision to enable themselves get the interest on the credit card (which is the easier to recover and makes them the most money) rather then the mortgage.

Chips Lovell · 12-03-2014 11:49AM

And if AIB repossess the home and don't manage to sell it for more than they expect to recoup from the written down mortgage, it'll cost the taxpayer even more.

Tiddlypeeps · 12-03-2014 11:54AM

I don't understand the need for the write down. If the couple are still able to keep up some repayments then can't they just reduce the interest rate and lower the monthly repayments?

Edit: I'm not trying to claim it's not necessary, I'd just like someone to explain like I'm 5 why this is a thing because i don't get it.

smcgiff · 12-03-2014 11:57AM

Vladimir Kurtains wrote: »

And if AIB repossess the home and don't manage to sell it for more than they expect to recoup from the written down mortgage, it'll cost the taxpayer even more.

Let logic get in the way of a good rant much :P

smcgiff · 12-03-2014 11:58AM

Tiddlypeeps wrote: »

I don't understand the need for the write down. If the couple are still able to keep up some repayments then can't they just reduce the interest rate and lower the monthly repayments?

Edit: I'm not trying to claim it's not necessary, I'd just like someone to explain like I'm 5 why this is a thing because i don't get it.

Because with the capital amount so high, even at no interest rate they couldn't afford it.

Hermy · 12-03-2014 11:59AM

The way I see it when the crash happened the banks were immediately bailed out with taxpayers money which only served the banks.
I don't understand why it wasn't the banks customers (mortgage holders) who were bailed out which in turn would have bailed out the banks.
What good is it having solvent banks if all the banks customers are insolvent?
Of course my knowledge of finance and economics is limited so I'm sure there are plenty of problems with that solution too.

Diemos · 12-03-2014 12:12PM

Hermy wrote: »

What good is it having solvent banks if all the banks customers are insolvent?

Because most bank customers are perfectly solvent, and a number of those who are not paying their mortgages are dong so by choice not necessity.

JustAddWater · 12-03-2014 12:15PM

keeponhurling wrote: »

I'm confused, is this bonanza presented by Marty Whelan or by Ronan Collins?

Kathryn Thomas and bressie

touts · 12-03-2014 12:17PM

As I watch my tax go to pay off someone elses mortgage I wish them well but I feel very foolish at having paid my mortgage every month.

First they came to bail out the gambling german pension funds but I did not speak out because I was not a gambling german bond holder
Then they came to bail out the private Irish banks but I did not speak out because I was not a private Irish bank.
Then they came to bail out Quinn insurance but I did not speak out because I was not Quinn insurance.
Then they came to bail out the developers but I did not speak out because I was not a developer.
Then they came to bail out the credit unions but I did not speak out because I was not a credit union.
Then they came to bail out the HSE but I did not speak out because I was not HSE.
Then they came to bail out the people who did not pay their mortgage but I did not speak out because I was not a person who did not pay their mortgage.
Then I needed a bailout but there was no one left to bail me out.

Tiddlypeeps · 12-03-2014 12:18PM

smcgiff wrote: »

Because with the capital amount so high, even at no interest rate they couldn't afford it.

Why not just increase the term of the mortgage? It might mean pushing the term past retirement age, but so what, they still have a chance of recovering their money as apposed to just giving up on it completely.

tin79 · 12-03-2014 12:24PM

touts wrote: »

As I watch my tax go to pay off someone elses mortgage I wish them well but I feel very foolish at having paid my mortgage every month.

First they came to bail out the gambling german pension funds but I did not speak out because I was not a gambling german bond holder
Then they came to bail out the private Irish banks but I did not speak out because I was not a private Irish bank.
Then they came to bail out Quinn insurance but I did not speak out because I was not Quinn insurance.
Then they came to bail out the developers but I did not speak out because I was not a developer.
Then they came to bail out the credit unions but I did not speak out because I was not a credit union.
Then they came to bail out the HSE but I did not speak out because I was not HSE.
Then they came to bail out the people who did not pay their mortgage but I did not speak out because I was not a person who did not pay their mortgage.
Then I needed a bailout but there was no one left to bail me out.

Cringeworthy

smcgiff · 12-03-2014 12:27PM

Tiddlypeeps wrote: »

Why not just increase the term of the mortgage? It might mean pushing the term past retirement age, but so what, they still have a chance of recovering their money as apposed to just giving up on it completely.

I think, possibly, that the bank may not be able to set up mortgages paying beyond retirement age. Ironically for prudence reasons. They may be forced, under their own(ECB) rules to take the hit, rather than kick the problem down the road.

The alternative is that it may have been more attractive for the couple to declare bankruptcy.

touts · 12-03-2014 12:31PM

tin79 wrote: »

Cringeworthy

The passive attitude of the Irish taxpayer who accepts everyone else getting bailed out while their taxes ramp up year after year after year is the real cringeworthy element. You just have to look through the international media to see disbelief that we are accepting all this.

dr.bollocko · 12-03-2014 12:36PM

I don't understand why mortgages are not getting foreclosed.

tin79 · 12-03-2014 12:37PM

touts wrote: »

The passive attitude of the Irish taxpayer who accepts everyone else getting bailed out while their taxes ramp up year after year after year is the real cringeworthy element. You just have to look through the international media to see disbelief that we are accepting all this.

Yes all the Irish tax payers are so lazy. Except you who are so proactive as to come on an anonymous forum and copy a few lines from the socialist handbook while never quite grasping how good you actually have it.

everdead.ie · 12-03-2014 12:38PM

dr.bollocko wrote: »

I don't understand why mortgages are not getting foreclosed.

Loop hole in the law you basically can't reposes a family home/primary residence buy to lets are getting repossessed however.

I think mortgages after a new law in 2009 was passed can be repossessed as well now but the law can't be retrospectively applied.

OldNotWIse · 12-03-2014 12:39PM

tin79 wrote: »

Yes all the Irish tax payers are so lazy. Except you who are so proactive as to come on an anonymous forum and copy a few lines from the socialist handbook while never quite grasping how good you actually have it.

We are not lazy, we're just too busy working our as*es off so that we can be fleeced to pay off those who wont pay their debts. :pac:

Tiddlypeeps · 12-03-2014 12:40PM

dr.bollocko wrote: »

I don't understand why mortgages are not getting foreclosed.

This would put more houses on the market which would in turn lower property prices leaving them even more out of pocket.

tin79 · 12-03-2014 12:47PM

Tiddlypeeps wrote: »

This would put more houses on the market which would in turn lower property prices leaving them even more out of pocket.

The main thing I have learned from the financial crisis is that everything anyone does is wrong. NAMA wrong, bailout wrong, repossession wrong, mortgage write off wrong, renting wrong, buying wrong.

Tough environment.

Lu Tze · 12-03-2014 12:48PM

Whatever happened to the debt for equity swaps which were being tabled a few months back. reduce mortgage by 150k, but bank get 30% stake in the house

dr.bollocko · 12-03-2014 12:50PM

Tiddlypeeps wrote: »

This would put more houses on the market which would in turn lower property prices leaving them even more out of pocket.

We are in the middle of an artificial price bubble in some places again because of lack of stock available though, right?

kjl · 12-03-2014 12:53PM

dr.bollocko wrote: »

We are in the middle of an artificial price bubble in some places again because of lack of stock available though, right?

I'm waiting for the bubble to pop before I buy my first place.

SEPT 23 1989 · 12-03-2014 12:54PM

hopefully this couple can now spend their money in the real economy

AIB in payout Bonanza for mortgage defaulters

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