AIB in payout Bonanza for mortgage defaulters

KyussBishop · 12-03-2014 02:49PM

Mr.Micro wrote: »

Whatever way it works, it's taxpayers money that AIB is writing off. In reality AIB should not exist, as it collapsed in economic crisis, only surviving with bailouts. I am sure many of the same types are still employed by the bank with the same incompetence and business naïveté.

It's taxpayers debt that AIB is writing off - the money for that debt will never exist, hence why they are writing it off.

hmmm · 12-03-2014 02:58PM

People who have made sacrifices to pay their mortgage, or anyone who rents, should feel sick at this news. This isn't about economics, this is about fairness and the type of society we want. Do we want a society where certain groups get "bailed out" by other groups, so that the former can continue to enjoy the lifestyles they think they should have but can't afford?

This sort of behaviour means that we will have a second property bubble, and it will be even worse than the first.

keeponhurling · 12-03-2014 03:09PM

Lots of people speculating about the circumstances of these borowers/defaulters.

Given that this is public money being granted to them, should there not be more info provided to the general public? Could the Freedom of Information Act be used here, as it is in the direct public interest.

Galwayguy35 · 12-03-2014 03:09PM

Cases like this this are a bit hard to take all right, anyone that went to school should be able to calculate how much they can pay back on a loan, it took me 5 minutes to work out out what I could afford.

Idiots who borrowed more than they should just because they wanted to live in the posh area or wanted the big fancy house get their debt written off while those of us who are actually paying our mortgages get nothing.

Someone somewhere will have to pay for this write off and others like it.

Chips Lovell · 12-03-2014 03:14PM

I should be worth stressing that repossessing a house also involves a write-off because invariably the amount outstanding on a loan is in excess of the current value of the house.

Either way, there's going to be a write off. It's often a case of deciding which will cost more.

KyussBishop · 12-03-2014 03:19PM

hmmm wrote: »

People who have made sacrifices to pay their mortgage, or anyone who rents, should feel sick at this news. This isn't about economics, this is about fairness and the type of society we want. Do we want a society where certain groups get "bailed out" by other groups, so that the former can continue to enjoy the lifestyles they think they should have but can't afford?

This sort of behaviour means that we will have a second property bubble, and it will be even worse than the first.

We will have a second property bubble because there has been no reform within the banks, to stop them lending recklessly like before - we will have debt writedowns because it is an economic inevitability, due to private debt being unsustainable; something has to give.

The only fair way to do a debt writedown, is to give everyone a writedown in a debt jubilee, and give those not in debt a lump-sum; but this is politically impossible due to Europe being unable to agree on any recovery measures.

12-03-2014 03:20PM

If they got away with out penalty that's a disgrace, I doubt that some how.

If you were offered the choice of a write off of some mortgage debt, but your credit rating would be ruined/servilely reduced for the rest of you life would anyone take it? remember that means no credit what so ever but you would be in your house with no chance of ever moving because you would never get another mortgage, or would you rather keep paying your original mortgage and be totally free financially to do what you like?

Zamboni · 12-03-2014 03:21PM

keeponhurling wrote: »

Lots of people speculating about the circumstances of these borowers/defaulters.

Given that this is public money being granted to them, should there not be more info provided to the general public? Could the Freedom of Information Act be used here, as it is in the direct public interest.

Call for your TD and the AIB "Public Interest" Directors to provide open and transparent details of who receives debt write downs.
It should be obligatory to waive data protection rights (in this context) for a write down.

There is no transparency in this process.
And where the is no transparency you can guarantee corruption.

KyussBishop · 12-03-2014 03:21PM

keeponhurling wrote: »

Lots of people speculating about the circumstances of these borowers/defaulters.

Given that this is public money being granted to them, should there not be more info provided to the general public? Could the Freedom of Information Act be used here, as it is in the direct public interest.

There is no public money being granted to them, they had part of their debt written off - the money for that debt would never have existed, because their mortgage was unsustainable.

suicide_circus · 12-03-2014 03:26PM

this practice is unjust and immoral. why can't these people be sent to the poor house?

Zamboni · 12-03-2014 03:27PM

suicide_circus wrote: »

this practice is unjust and immoral. why can't these people be sent to the poor house?

Or they could just rent accommodation within their means like normal people.

suicide_circus · 12-03-2014 03:30PM

Zamboni wrote: »

Or they could just rent accommodation within their means like normal people.

no no, the poor house is the way to go. sure all the hipsters are eating gruel nowadays.

zl1whqvjs75cdy · 12-03-2014 03:38PM

Off to the bank to take a loan way beyond my means. Spot me after lads yeah?

anncoates · 12-03-2014 03:41PM

Zamboni wrote: »

Or they could just rent accommodation within their means like normal people.

The idea that greedy basket cases like AIB sign away money due to them out of benevolence is laughable. This is the same bank we're talking about?

A lot of the mortgages are probably for boom properties that will never attain their sale price again. If the bank repossess a property with a 400k mortgage now worth 150k, that's 250k still outstanding.

If the person genuinely can't make repayments on 400k, they'll hardly make them on 250k when forced to rent a family home in tandem. If the person goes bankrupt, the debt is gone. That loss becomes crystallized. on the bank's accounts.

Presumably if they keep getting repayments on, say, 250k (which with interest will be probably twice that over the life of the mortgage) , the loan is still functioning and they obviously see that as preferable.

I can understand that it being AH, people have a touching faith in the power of whining and finger pointing as a salve to economic issues but the situation exists and either way, thanks to our asinine elected representatives, the taxpayer has and will take a hit.

Just acknowledging that doesn't make you a apologists for anybody .

Zamboni · 12-03-2014 03:43PM

anncoates wrote: »

The idea that greedy basket cases like AIB sign away money due to them out of benevolence is laughable. This is the same bank we're talking about?

A lot of the mortgages are probably for boom properties that will never attain their sale price again. If the bank repossess a property with a 400k mortgage worth 150k, that's 250k outstanding. If the person genuinely can't make repayments on 400k, they'll hardly make them on 250k when forced to rent a family home in tandem. If the person goes bankrupt, the debt is gone. That loss becomes crystallized.

Presumably if they keep getting repayments on, say, 250k (which with interest will be probably twice that over the life of the mortgage) , the loan is still functioning and they obviously see that as preferable.

I can understand that it being AH, people have a touching faith in the power of whining and finger pointing as a salve to economic issues but the situation exists and either way, thanks to our asinine elected representatives, the taxpayer has and will take a hit.

Just acknowledging that doesn't make you a apologists for anybody .

If they cannot afford rent there are a range of state assistance schemes.
RA and Council Housing etc.
They could afford the repayments then.

anncoates · 12-03-2014 03:44PM

Zamboni wrote: »

If they cannot afford rent there are a range of state assistance schemes.
RA and Council Housing etc..

...funded by the taxpayer.

Plus you don't live rent free in local authority housing if you work. You pay up to a quarter of your monthly income.

And local authority housing is stretched to breaking point.

Zamboni · 12-03-2014 03:47PM

anncoates wrote: »

...funded by the taxpayer.

Do you know how many years council housing you could get for a family with €150k?

anncoates · 12-03-2014 03:49PM

Zamboni wrote: »

Do you know how many years council housing you could get for a family with €150k?

See my above post.

Do you think the local authorities give people with jobs free houses?

And there has been virtually no local authority housing construction sinc the start of the Celtic Tiger.

Fishyfreak · 12-03-2014 03:56PM

If the original Mortgage was €400k, the total Mortgage repayments to the bank would be in the region of €810k over the total term of 35 years at 4.65%.

Yes the couple are getting a write-off but they will still be paying the bank in excess of €500k over the term of their new mortgage.

The bank now have a performing loan, the couple can now get their life back on track. Everyone is a winner. The bank have still sold a product to the couple at a profit.

Zamboni · 12-03-2014 03:57PM

anncoates wrote: »

See my above post.

Do you think the local authorities give people with jobs free houses?

And there has been virtually no local authority housing construction sinc the start of the Celtic Tiger.

If NAMA stopped giving Jan O'Sullivan the runaround there is actually plenty.

So now the couple could live in Council Housing, pay their contribution for rent and pay off the remaining debts.

The house gets auctioned off with other thus reducing house prices.

Private tenants start buying again thus reducing rental demand and prices.

RA tenants don't have to protest outside the Dail requesting top ups from Joan Burton.

It is all a chain. Stand back and look at the big picture.

20Cent · 12-03-2014 04:00PM

The banks bondholders hedge funds etc all have already been bailed out. Large companies have had tens of millions written off and no one cares. But when some citizen in deep trouble gets a write off everyone looses their minds!

JPCN1 · 12-03-2014 04:05PM

AIB have effectively written off 50% of the mortgage. They should have taken 50% equity in the property, that way the taxpayer will get paid out sometime in the future.

Tiddlypeeps · 12-03-2014 04:07PM

20Cent wrote: »

The banks bondholders hedge funds etc all have already been bailed out. Large companies have had tens of millions written off and no one cares. But when some citizen in deep trouble gets a write off everyone looses their minds!

I don't know where you have been if you think nobody cares about those other things

anncoates · 12-03-2014 04:08PM

Zamboni wrote: »

So now the couple could live in Council Housing, pay their contribution for rent and pay off the remaining debts.

They're a working couple deemed able to service a mortgage of 250k.

They're not going to skip the thousands of existing low-income families in the queue for over-stretched local authority housing?

They will end up where even the majority of even low-income applicants end up: in private rented accommodation.

The NAMA reference is pointless. NAMA sells or rents proprieties at the highest return it can get. They're not there to provide cheap housing.

bbam · 12-03-2014 04:09PM

I agree with other posters.
We either pay through debt forgiveness or we kick them out in their asses and pay via social welfare and create a broken home.
On our behalf the government if the day let this happen. So now on our behalf a solution must happen.

I make my mortgage payments but not everyone is so lucky as we both have jobs.

People need to get over the idea that these people are getting one over on us all. Having no work and no means to live and pay your mortgage is hardly getting one over on us.

Zamboni · 12-03-2014 04:10PM

bbam wrote: »

I agree with other posters.
We either pay through debt forgiveness or we kick them out in their asses and pay via social welfare and create a broken home.
On our behalf the government if the day let this happen. So now on our behalf a solution must happen.

I make my mortgage payments but not everyone is so lucky as we both have jobs.

People need to get over the idea that these people are getting one over on us all. Having no work and no means to live and pay your mortgage is hardly getting one over on us.

They are both in employment..................

PinkLemonade · 12-03-2014 04:11PM

I know this is after hours but it's disgusting some people's attitudes here

12-03-2014 04:12PM

Zamboni wrote: »

If NAMA stopped giving Jan O'Sullivan the runaround there is actually plenty.

So now the couple could live in Council Housing, pay their contribution for rent and pay off the remaining debts.

The house gets auctioned off with other thus reducing house prices.

Private tenants start buying again thus reducing rental demand and prices.

RA tenants don't have to protest outside the Dail requesting top ups from Joan Burton.

It is all a chain. Stand back and look at the big picture.

There are vast amounts of empty council housing in Dublin? ( and no they cant be asked to move to Donegal, because if that was the case every one looking for council housing should be obliged to move any where in the county) If every mortgage defaulter when on the council housing list there would be chaos, let alone the fact that council housing is very expensive as a way of housing people... council housing and rent allowance is funded by the tax payers. While I would have misgivings about mass write down of mortgage debt, some of the replies here are ridicules and seem to have dubious motivations.

Zamboni · 12-03-2014 04:14PM

anncoates wrote: »

They're not going to skip the thousands of existing low-income families in the queue for over-stretched local authority housing?

Everything is fine. We can build them a new house.

http://www.labour.ie/press/2014/03/11/osullivan-launches-68m-local-authority-constructio/

anncoates · 12-03-2014 04:27PM

Zamboni wrote: »

Everything is fine. We can build them a new house.

http://www.labour.ie/press/2014/03/11/osullivan-launches-68m-local-authority-constructio/

There's apparently nearly 100,000 families on the local authority waiting lists.

We stopped building them during the tiger and developers bought their way out of integrating social housing into new developments.

AIB in payout Bonanza for mortgage defaulters

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