AIB in payout Bonanza for mortgage defaulters

This is the only way that many of the unsustainable mortgages can be resolved - there are a large amount of them being long-fingered into the future, that are going to require writeoffs - it's simply not possible now, that all of them will be paid.

There's a lot of private debt out there, with no presently sustainable way of being repaid (not unless we have a full-blown economic recovery - not this measly 'still 5-10+ years away from full employment' faux recovery; if we head into deflation, which we're at risk of now, that's not going to last long - and deflation will make debts even more unsustainable).

What matters now, is that this is done fairly - without banks fraudulently giving writeoff's to people with the right connections.
The most (practical and) fair way of doing this, would be a blanket debt-jubilee - but that's politically impossible, as it'd have to be agreed at an EU level - where nothing can ever be agreed upon, when it comes to economic recovery.

kjl wrote: »

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

There's no way of telling how long that bubble will last - could be decades - it's likely wealthy rentiers with a lot of cash at hand, snapping up houses, rather than the previous debt-based bubble.

It's advantageous for them to keep prices high, as it helps them keep rents high too, and they'll have the political support to do it as well, to stop prices falling, which avoids the banks acknowledging their insolvency.

Presume the bank just weighed up getting a reduced but steady amount paid off the mortgage long term against the hassle of foreclosing the house and trying to sell it at a loss, as well as seeing that loss actually realized on their balances immediately.

I doubt any institution - especially a bank - just writes off debt out of sheer benevolence.

smcgiff wrote: »

I think, possibly, that the bank may not be able to set up mortgages paying beyond retirement age.

My father in laws mortgage well exceeds his retirement age. How any bank thought someone would or could continue paying the mortgage into their 80s is beyond me.

ForstalDave wrote: »

This could end up costing AIB alot more in the long run

Like I said, they probably just balanced it all and went for their best chance of getting something.

You put the people out of their house and sell it and they're still liable for negative equity plus exorbitant rent as they now have no family home. So rent + negative equity means the chance of the bank getting the negative equity owed is even worse. If the guy goes bankrupt they get fuck all.

They probably just weighed it up and thought getting 250k (plus interest) is as good as they could hope for at the time.

I would assume if the house is sold above a certain price, the bank can claw back the written off balance as well.

username123 wrote: »

My father in laws mortgage well exceeds his retirement age. How any bank thought someone would or could continue paying the mortgage into their 80s is beyond me.

Given the sheer breadth of reckless lending by banks, it's likely they never expected it all to be paid off, but was done to enrich property developer friends, and bank CEO's/management (though salaries/bonuses/perks etc.), and to enrich other friends in related financial sectors.

Today, one of the fastest ways for a wide array of people to get rich, is to profit off of a fraudulent economic bubble - and property is the most profitable of all, because of how much economic activity it generates.

The more unsustainable the bubble, the more useless the property and locations of that property (since that allows more to be built and wildly changes the on-paper valuation of the land/property, based on the initial investment), the more false short-term 'profits' can be put down in the books, and the higher the payments/perks people can justify for themselves; the property doesn't even need to be useful, it can just be an excuse for funnelling huge amounts of money into useless efforts, that people can skim profits from.

Then when it all goes to shít, they can just walk away from it and let the rest of society pay for the mess; so yes, unsustainable mortgages are a feature, not a bug.

dr.bollocko wrote: »

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

Presumably all but a minuscule amount would never cover the outstanding mortgage if sold at them moment.

Eight Ball wrote: »

It's not just these people either it's the long term scroungers on the dole (and I don't mean the newly unemployed) and the fat pensions for PS that we can't afford.

Don't forget the travellers and the feminists as well.

Tiddlypeeps wrote: »

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

like returning houses to their actual value? cant be doing that can we :eek:

It's bizarre really, that people defend banks and developers being able to heavily overprice their assets (and profit from that, through sales and new developments), by allowing the entire property market to be manipulated.