Will anything ever be done about neg equity??

I'm in the same boat as so many others, bought what was to be a starter house in 2006 at the height of the boom, and now have negative equity of approx €180k after we had the house valued last month.
We would love to move house as we are not living near work or childminder and as a result I get no time with my children as I'm picking them up from work at their bedtime or near enough to.
We qualify for a new mortgage amount that covers the negative equity portion plus the cost of a property where we want to live but there is no mortgage product to allow us do this. Frustrating as the negative equity would be the same amount regardless of the house we're living in and so is the same risk to the bank, i.e in worst case scenario and we were ever in a position where the house was repossessed the bank would be at a loss for the same amount. I hope that makes sense.
Sorry this has become a bit long winded, I just wonder will the banks ever come up with a decent and equitable (excuse the pun) neg equity mortgage product or is there even any hope that there may be small write downs of neg equity to help people

No

why would the banks do anything for you are anyone else??

They must have written the insolvency bill themselves it couldnt be worse.

Either live with it or come up with your own solution, Banks are there to get as much money as they can from anyone they can by any means possible and do whatever it takes to do that, your childminder or your child couldnt matter less.

Well if I had a solution I wouldn't be asking the question! And no I don't want to live with it as I am stuck in an awful area where I can't let my children out to play.
And actually the bank would gain from allowing me a new mortgage to move as I would lose my tracker rate (yes I am that desperate to move) and would make more money from me in terms of interest on a higher rate and higher mortgage. As I stated, we qualify for the amount based on income and affordability but there is no product to allow us move the negative equity. The risk to the bank is exactly the same whether we lived in this house or moved.

Working mam said:

Well if I had a solution I wouldn't be asking the question! And no I don't want to live with it as I am stuck in an awful area where I can't let my children out to play.
And actually the bank would gain from allowing me a new mortgage to move as I would lose my tracker rate (yes I am that desperate to move) and would make more money from me in terms of interest on a higher rate and higher mortgage. As I stated, we qualify for the amount based on income and affordability but there is no product to allow us move the negative equity. The risk to the bank is exactly the same whether we lived in this house or moved.

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You should never have bought in the awful area.

I bought in 2006, now the place is 60% devalued, its a nice area though, so its not the worst.

I don't think anything will happen to negative equity, it is as it is.

STEINER said:

You should never have bought in the awful area.

I bought in 2006, now the place is 60% devalued, its a nice area though, so its not the worst.

I don't think anything will happen to negative equity, it is as it is.

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Thanks for pointing out the obvious, really helpful to what my post is actually about. It was as close to family and work at that time that we could afford and as I say it was a starter house which we hoped to sell within 3 years. I think my point about being able to transfer negative equity in cases where it is affordable to do so is getting lost.

Thanks cashier for a helpful answer, I don't know much about that side of things, but it may be something we could explore. Not ideal as we'd be leaving behind permanent jobs but it's food for thought.

Absolutely, I don't want a 'quick fix' or to walk away from my responsibilities unless I was left with no options. I just want to pay what I owe - but on a different address. Such a simple thing yet being made impossible by the idiots running this country and the banks. I wonder if one day someone in power will actually use some innovation

You could take a career break? You could also put the debt onto one name or the other and only one of you go. You have options holding on to a massive mortgage on a house you dont want doesn't seem logical.

No career breaks available in either of our jobs plus we couldn't transfer the debt into one name as the bank wouldn't allow that based on what we earn individually. We have young children so one of us going is also a no go. Thanks for the suggestions though, and yes I totally agree holding onto a house we don't want with a massive mortgage is ridiculous. The bank just don't understand the concept of a fairly logical process!

If you can afford the debt, would you consider selling the house anyway at the lesser amount and asking the bank to move the remainder to a loan or some other vehicle, and maybe rent for a few years in the area you would prefer to be?
Or try to rent yours out and rent somewhere else?


I feel for you and where you are coming from as house debt is preventing many people from doing what they would like as regards moving and trading up and down.

Micheller, that would be an acceptable option to us, selling the house and paying back the neg equity while renting - guess what, bank won't allow it! We may rent and rent out this house, I just really didn't want the hassle of being a landlord (repairs, having to pay mortgage plus rent in months when the house isnt rented out etc) and also still being stuck with a house we just want rid of. I guess there is just no easy answer but thank you for your suggestions

Persistence with the bank worked in our case but the NE was a lot lower. Therefore, I'm reluctant to advise persistence in your case.

Have you thought about talking with a good financial adviser re the possibilities?

I had thought some banks (BOI, AIB) were planning to provide negative equity mortgages.

Don't know if it's possible, but why don't you offer your house to NAMA who seem to be building a collection of assets for sale?

CadillacMan said:

Persistence with the bank worked in our case but the NE was a lot lower. Therefore, I'm reluctant to advise persistence in your case.

Have you thought about talking with a good financial adviser re the possibilities?

I had thought some banks (BOI, AIB) were planning to provide negative equity mortgages.

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Our mortgage is with ptsb, and they don't cater for upgrading with neg equity and as far as I know have no plans to do so. Shame as they could lose some trackers off their books from desperate people like me!
BOI have introduced a NE mortgage but I think you have to come up with a percentage of your NE which I remember working out to be around €40k, we have good savings but not quite that amount. Plus other banks won't take on another banks debts. Thanks for taking the time to reply to my post though

Eithneangela said:

Don't know if it's possible, but why don't you offer your house to NAMA who seem to be building a collection of assets for sale?

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Really?? I haven't heard of this, I must google some info on it, thank you! Although I'm sure the bank will find some way of saying no to this also!!

What annoys me is the knowledge that banks might be willing to write down some debt for people who cannot pay their mortgages but at the same time there are people who continue to pay their mortgages despite having no money left over at the end of the month and the banks are unwilling to help them.

I mean for those who bought in 2006 and now have huge NE then why cant the banks write down their some of the mortgage to reflect the current value of the house. It's totally unfair. It's almost like you would be as well off to lose your job and then qualify for this mortgage write down. Give it a few months and find a new job and at the same time have no mortgage.

Working mam said:

Thanks for pointing out the obvious, really helpful to what my post is actually about. It was as close to family and work at that time that we could afford and as I say it was a starter house which we hoped to sell within 3 years. I think my point about being able to transfer negative equity in cases where it is affordable to do so is getting lost.

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I answered your negative equity question.

To answer the question, will anything be done about negative equity?

No, I don't think it will, at least not on a government policy or legislative basis.
Banks may in time come up with a variety of solutions when there is more liquidity and/or competition in the Market.

The reason I ask is that 2 seperate financial advisors told me to sit tight for now as the banks must have proposals for cost cutting, negative equity etc submitted by end of June and they were hopeful there may be something within that to help people in my position. What that could be I've no idea. My guess is it will continue to ignore the people who are paying their mortgages and we will become the Bermuda triangle of people needing help to move house.

Hi Working mam,

I don't think their will be anything done about the avalanche of negative equity that is weighing most mortgage holders down. For the past two / three years I've been speaking to financial advisors, bankruptcy experts etc. and all agree that nothing will be done; the can will get kicked further and further down the road. Its all a disaster waiting to happen.

I'm in approx. 200k of negative equity, have put umpteen proposals to the bank all to no avail, at best I'd be lucky if they answered me.