Why do people expect to be let off Negative Equity? You made a promise, stick to it!

Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

I've heard all this before and I still ask the same question (and haven't had a satisfactory response from any of the "poor mortgage holders"). The question is this. Let's say I agree that those who over-borrowed should be compensated in some way, because the economy slumped, and they're now suffering. (I don't agree, by the way, but let's say I do). If things had gone the other way (ie property had continued to boom, and these "poor mortgage holders" now sat on a pot of gold) would those "poor mortgage holders" be prepared to put loads of money back into the pot for those of us who hadn't been able to invest in property? It's so simple. If you decide to take a risk (and investing is a risk, even in property) then you must be prepared for the consequences. Otherwise, we would all take lots of risks, safe in the knowledge that we would be bailed out if it all went belly up! In fact the word "risk" wouldn't need to exist.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

PetPal said:
I've heard all this before and I still ask the same question (and haven't had a satisfactory response from any of the "poor mortgage holders"). The question is this. Let's say I agree that those who over-borrowed should be compensated in some way, because the economy slumped, and they're now suffering. (I don't agree, by the way, but let's say I do). If things had gone the other way (ie property had continued to boom, and these "poor mortgage holders" now sat on a pot of gold) would those "poor mortgage holders" be prepared to put loads of money back into the pot for those of us who hadn't been able to invest in property? It's so simple. If you decide to take a risk (and investing is a risk, even in property) then you must be prepared for the consequences. Otherwise, we would all take lots of risks, safe in the knowledge that we would be bailed out if it all went belly up! In fact the word "risk" wouldn't need to exist.
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There is no poor mortgage holders, there is no compensation, reward for foolish behaviour etc, there are assets in the system that owe more than they are worth.

I don't get this idea of the good putting 'their' money back into a 'pot' for the bad people. You are not giving anyone anything, so where is the begrudgery coming from? Forget dodgy builders running amok and unmarried mothers with beemers and semi-Ds. Just think of the system of how debt is controlled in this tiny little country of ours.

An example I would use is this. You have a houses in an estate and when they were built they cost 150k. People bought those houses and happy days. The market goes up and after 5 years they are worth 300k. Some sell some dont and stay put. Market slumps and house prices falls to 150k again. Are you telling me that while not affecting you, having paid 5 years into a 150k mortage and who now sites on that little profit after the up and down would object to the person with a year old mortage of 300k on the exact same house? It seems to me that people want those who moved late to 'take their medicine' for wreckless behaviour when all they might have done was to have a family in a boom and need bigger digs?

This is the attitude I mentioned before. Irish people are irrational, illogical and bitter and have no respect for their common Irish man/woman. This attitude is rife in politics and banking and just about everywhere.

What I suggested was a way to help the Irish people as a whole, not to give handouts (which is not what this equates to)

I'm not a poor mortage holder with a grudge by the way. Like the previous poster I played safe and am quite confortable (without the 6 figures mind you), just in case thats what was crossing your mind.

I would just like to see an completely sane, logical and intelligent solution, that fixes the mess and educates people so that it wont happen again by choice, not by fear of law or regulation.

But none of this is going to be a satisfactory response I fear. I actually doubt there would be one for you
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

So just to be clear:

1. Prices go up 50%: mortgage holders keep the 50%, everyone else gets nothing.
2. Prices go down 50%: mortgages holders get the 50% back from everyone else, they lose.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

The topic is convoluted for many reasons which are specific to the Irish culture. Young people are brain-washed into thinking that apartments are merely "starter homes" in which children could not possibly be effectively raised (while parents in cities all over Europe are doing it), which in turn leads to the feeling of "hard done-by-ness" when the expected escape to a house with a front and back garden looks like it's out of reach. The "starter home" mentality impacted on the quality and location of building - meaning much of what has been built is less than ideal in terms of standards and may very well be unsuitable for families because the firmly held belief was that couples would "trade up". In addition, going forth to multiply is seen as a right in Ireland as opposed to something you may or may not be able to afford - which in turn leads to a second wallop of "hard done-by-ness" if the desired family size seems out of reach. I am not criticising these perspectives - I see them as part of our culture.

I believe in personal responsibility, but don't buy into the notion that we each operate as independent islands and are fully-equipped to make wise decisions in spite of the noise around us and that bad decisions equates to "greed" - the reality is that young people were being encouraged and urged into borrowing for homes, investments, and all sorts of other products because our society descended into the most profit-focussed decade in its history - and possibly in its future. I am not in negative equity or in financial trouble, but I will not attempt to separate myself from those who are. To use the word "greed" is inappropriate in many cases - many people were swept up by the prevailing tide which we all did our part in creating - even if only by paying the €6 for that floppy white-bread sandwich.

That tide has changed, but it's simplistic to say that we're now less "greedy" - we are forced as a society to re-evaluate and re-prioritize by our new-found circumstances.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Warren Buffett tells a story about a meeting with a high-flying millionaire (let's call him Sam). During the meeting, a young man came in to server refreshments. Warren asked Sam "would you trust this man to run with your investments - to get you the best deals so that you can retire as wealthy as possible?". Sam laughed and said "of course not! he's completely unqualified!" to which Warren responded "then why do you expect him to run his own investments?"

This was in reference to the gross inequities created by privatized pensions in the U.S. Those who were "in the know" and had the best advisers do very very well. Joe Soap is lucky if he ends up in the black.

I think that analogy can be applied here - a collective responsibility is essential.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Hear hear
 
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