Letter from Irish Moral Hazard Organisation to Government re Mortgage Arrears
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Gerry Canning
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I strongly sympathize with the idea but can not support it as presented.
.I want you the ordinary taxpayers to be treated in the same way as other debts are treated.
Businesses eg (Independent News & Media) get huge write offs and continue to live and work and make profit with zilch future benefit to Mr Taxpayer..
I presume that without a write off/down the business must be (repposessed) etc and sold to highest bidder.
And remember it was Taxpayer not business who bailed out Banks.
We Mr Taxpayer have subsidized our Banks to make fair and reasoned write downs were necessary.
I have no issue with realistic writedowns but would strenuously object to said beneficiary getting windfall money in future.
I strongly believe that any writedown must be couched that Mr Taxpayer gets the larger share of any upturns.
I do not want writedowns to be a money spinner for anyone other than the Taxpayer.
.I want you the ordinary taxpayers to be treated in the same way as other debts are treated.
Businesses eg (Independent News & Media) get huge write offs and continue to live and work and make profit with zilch future benefit to Mr Taxpayer..
I presume that without a write off/down the business must be (repposessed) etc and sold to highest bidder.
And remember it was Taxpayer not business who bailed out Banks.
We Mr Taxpayer have subsidized our Banks to make fair and reasoned write downs were necessary.
I have no issue with realistic writedowns but would strenuously object to said beneficiary getting windfall money in future.
I strongly believe that any writedown must be couched that Mr Taxpayer gets the larger share of any upturns.
I do not want writedowns to be a money spinner for anyone other than the Taxpayer.
Brendan Burgess
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Yes, they usually would be. That is called "capitalizing" arrears and is the most common form of rescheduling.
Brendan
Indeed. Quote from Michael Noonan today:
“If you look at the billions that were involved in Nama and the billions that were involved in all the banks, the way of restructuring was write offs so there is nothing unusual about huge write offs, massive write offs."
Hmmmmm.
Once difference though is that in the case of NAMA all taxpayers carry the can, in this particular case we have a group of taxpayers expecting the rest of the taxpayers to carry the can to their benefit...
Gerry Canning
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Jim 2007, Not sure what you mean?
In Nama , I would think that in most cases pragmatic deals were done.
In Mortgages , pragmatism and what suits us should trump any Moral Hazard argument.
As an example if it costs us in write down k50 to keep someone in a home v cost of rehoming/housing at say societal cost of k100, then sense says do it and swallow hard!
In Nama , I would think that in most cases pragmatic deals were done.
In Mortgages , pragmatism and what suits us should trump any Moral Hazard argument.
As an example if it costs us in write down k50 to keep someone in a home v cost of rehoming/housing at say societal cost of k100, then sense says do it and swallow hard!
To a certain extend I agree with you, but only if social housing is defined along the same lines as in mainland Europe - in other words a roof over your head, but we both know that that is now what we are talking about! To mind my in such situations the family should be assessed for social housing and if their current house was found to be inline then fine they get to stay, but if not they get moved on to an appropriate housing scheme while someone more deserving of that house moves in. If we are really going to do this under social housing then it should be exactly that.
The politicians know very well that there is very few votes in writing down some people's debt, while others must continue meeting their financial commitments.
That is based on the assumption that all/most would qualify for housing/rent allowance.I hate this being part of the reasoning because I think the reality would be different and suspect many in arrears have reasonable income.David Hall and others want to convey the idea that all/most in arrears are unemployed and on social welfare,and would go straight to rent allowance.As I say, I reckon the reality would be different.
Gerry Canning
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..............Theo.
If many in arrears have reasonable income that would come out in any type of check.
I do not think that people on (hidden) reasonable income are many and I would be fairly sure they would baulk at being checked to see if they are genuine.
David Hall & others, from my reading ,included the coping classes ie taxpayers who in fluffy times could manage but now are over squeezed.It would I think be reasonable to assist them.
I have no truck with leg-lifters or those who think they are entitled without having responsibility.
..........Jim2007.
I 100% agree with you.
I am not wanting us to simply pay for lifestyle preferences.
Agreed, the issue is people do not want to leave a very nice family home to go into the rental market. And whose fault is it the rental market is not attractive, governmetn policy which does not encourage refurbishment, which does not encourage investors (taxes making it unprofitable, hard to remove bad tenants and exit taxes at 33% if you should by any chance make a capital gain)
If a house is repossessed it is not knocked down or blown up. It doesn't disappear into a void in the space-time continuum. It will be sold to someone else and they will live in it. That person will most likely be moving from rental accommodation and if not then from another home and so the cycle of movement within the market will continue.
The "We'll have to pay for them to go into social housing" argument is nonsense.
I know a person who hasn't paid their mortgage in 7 years but still goes on at least 2 holidays a year and lives an opulent lifestyle. They should have been dragged out of the house about 5 years ago.
The "We'll have to pay for them to go into social housing" argument is nonsense.
I know a person who hasn't paid their mortgage in 7 years but still goes on at least 2 holidays a year and lives an opulent lifestyle. They should have been dragged out of the house about 5 years ago.
Gordon Gekko
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Begrudgery is alive and well. The "moral hazard" people are akin to Marie Antoinette saying "let them eat cake". The financial crisis has left hundreds of thousands of our fellow citizens crippled financially. I didn't suffer the same fate. Do I care if the State helps people get back on their feet? No, because it's the right thing to do. Those in arrears are being painted as spoofers and it's being implied that they are milking the system. I don't see that - I see people who are probably crying themselves to sleep and wondering how they can get their families out of the holes that they're in. I see the spike in the suicide figures that nobody talks about.
epicaricacy
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Well done Gordon!!!!!!!!
I've grown weary from the same old arguments being trotted out about all of the 'strategic defaulters' out there. Every one seems to know of at least 1 person who is going on 2 holidays per year etc. whilst paying nothing towards their mortgage (as if anyone would be stupid enough to broadcast his / her 'strategy' in a country full of begrudgers) and from this specific 'example', they engage in inductive reasoning (from the specific to the general) and suggest massive numbers of our fellow citizens are at it.
They seem to conveniently ignore the reality of the financial crisis and how the crisis disproportionatley affected certain demographics of our economy e.g. constuction workers. Figures are freely manipulated to 'back up' the unfounded hypothesis of widespread strategic default. The Einstellung Effect is proven again and again.
The 'would anyone think about the SVR payers' is being cynically used as a smoke screen to attack the 'strategic defaulters'.
Unfortunately, history has taught us again and again, that people turn on each other in times of financial distress and that certain personality types thrive in identifying some 'greedy and selfish minority' (strategic defaulter) that is to somehow to 'blame'.
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Hi epicaricacy
Given your own experiences, you understandably have strong views on the subject of resolving mortgage arrears. However, I am unclear what approach you would take to resolving this problem. If you were King for a day, what would you do?