Frontline programme on mortgage arrears and negative equity

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Purple said:
Very hard to prove ONQ, nigh on impossible I'd say.

As for professionalism, well, I take the concept with a pinch of salt. "Professionals" are as susceptible to human frailty and weakness as anyone else. There are as many greedy and unscrupulous doctors, solicitors, accountants and estate agents (and architects :D) as there are greedy and unscrupulous plumbers, shop assistants, IT consultants or painters. People are people, no matter what they wear to work.
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I take great offence at you putting IT consultants into the latter group...It is an insult to the latter group :D
 
Has anyone mentioned Negative Equity doesn't actually mean anything?

Unless you are selling then it doesn't matter.

It's like complaining your car isn't worth the same once you drive it off the showcourt.
 
bryanod said:
Has anyone mentioned Negative Equity doesn't actually mean anything?

Unless you are selling then it doesn't matter.

It's like complaining your car isn't worth the same once you drive it off the showcourt.
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It's handy to have someone to blame though ;)

I agree. When house prices were increasing did people go to either the bank or the person they bought the house from and offer to pay them more? Again, this is a case of personalising the gain and socialising the loss.....2 wrongs. Finally, when the economy does recover and house prices do start to rise what happens then? Someone who has half their mortgage written off is going to be up a lot of money at the expense of everyone else.
 
Brendan might be interested in viewing this;
http://www.irishexaminer.ie/ireland/mortgage-plan-vague-and-lacking-in-urgency-170517.html

I’D RATHER BURN MY HOME THAN RENT IT OFF THE BANKS’
Struggling mortgage holder hits out at report - By Claire O’Sullivan

CAROLINE LENNON-NALLY has been in mortgage arrears for the past 10 months, and is one of the thousands of distressed mortgage holders Declan Keane refers to in his report into the mortgage debt crisis, which was published yesterday.

But the idea of becoming a social housing tenant in "her own home", as the report recommends, sends her into a tailspin.

She said she has already paid about €50,000 in mortgage repayments to her bank, a size-able deposit when she bought her home, as well as stamp duty.

"I’d rather burn it than rent it back off the banks," she said. "I have put huge amounts of my own money into this house. I worked my whole life for it. Anyway, it’s only worth about €200,000 to them now."

She paid €385,000 for the property, but her bill came to €412,000 by the time she had paid stamp duty and legal fees.

Stuck in a 5.5% fixed-rate mortgage, negotiated in 2007 when she bought her home, she found it increasingly difficult to meet her €1,470 mortgage repayments, which were fixed at interest only until 2012.

Last winter, Caroline realised she could only afford to pay €1,000 per month and told her bank, which said she would have to pay €8,000 to break the agreement. For the past 10 months she has paid €1,000 into an account every month to prove she is willing to pay — but not on their terms.

Caroline has founded Irish Home Owners United, which will meet legal group New Beginning and the Defend Our Homes alliance later this week.

- Irish Homeowners Unite can be contacted through Facebook at http://exa.mn/homes.

Picture: Caroline Lennon-Nally has made mortgage repayments of €50,000 to her bank since she bought it for €385,000 in 2007. She found it increasingly difficult to meet her €1,470 monthly mortgage repayments and offered to pay €1,000 instead. Picture: Robert Redmon
This appeared in the printed version of the Irish Examiner Thursday, October 13, 2011


Read more: http://www.irishexaminer.ie/ireland...-lacking-in-urgency-170517.html#ixzz1aei9c6R1
 
Purple said:
Over the last few years I think we’ve all learned that paying someone more doesn’t make them more honest.
That seems self evident to me but I must be a bit slow or just not be aware of the moral purification training that professionals go through (is it something like what Mr. Spock went through on Vulcan?).

I think so so-called professionals confuse self-importance with integrity.
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I totally accept your point that paying people more money doesn't "make" them honest.
I think there is a corollary argument being appointed by a client doesn't mean you will get paid by them.
I have previously argued in relation to bankers particularly, that paying them more money doesn't ensure you get competence.
This goes hand in hand with another argument on another topic by applicable here, that a person's formal qualification doesn't guarantee they will act with integrity.


I think some people have justifiable concerns about people who claim to be professional, which I share BTW.
I've run met people in my profession who failed to impress and I have advised on court actions in which they acted for the other side.
I also accept that there are people (possibly the same people!) who also seem to charge way over the odds for providing a professional service.

I can only answer for my own office, the remuneration I receive on my jobs, the standards of the profession of which I am part and how I apply those standards.
Because I know how the standards *should* be applied, that is why I can say a professional "should" have this higher duty of care, regardless of how much they are paid.
That is why neither the Nuremberg Defense or the "everyone was doing it" defense cannot apply to the bankers - they were providing a professional service and had a duty to discharge.
 
truthseeker said:
Without commenting on the particular case mentioned, I can see this being the attitude of many people with regards to the new schemes.
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I agree some will. However, for those who bought apartments in bally-go-backwards they must be delighted with the prospect. They get the debt written off and agree to rent the apartment from the bank. 6 months down the road they decide that they would rather rent somewhere else thankyou very much. What happens then? The bank has to write off the whole amount owing to them and the taxpayer again comes to the rescue. Madness.
 
thedaras said:
Stuck in a 5.5% fixed-rate mortgage, negotiated in 2007 when she bought her home, she found it increasingly difficult to meet her €1,470 mortgage repayments, which were fixed at interest only until 2012.
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Was she under the impression that she could afford the fixed rate for five years?
What changed since 2007 to make it unsustainable for her to pay this?

One major issue seems to be the fixed rate mortgage.
The other seems to be this figure of €8,000.
 
I mean is that I bought my home to live in, not trade up from per se, and I expected to be paying around 10% interest on the mortgage.
I cut my cloth according to my measure and we discounted my wife's income at the time before setting out buying budget.

This homeowner seems to have bought way beyond their means (50% more) to repay even at around 5%.
Do we have any overall estimated figures on this, stress-tested mortgage payment ability?

Because this seems to have nothing to do with negative equity - its ability to pay.
 
onq said:
Was she under the impression that she could afford the fixed rate for five years?
What changed since 2007 to make it unsustainable for her to pay this?

One major issue seems to be the fixed rate mortgage.
The other seems to be this figure of €8,000.
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Finally more detail on the professional civil servants case.

What changed since 2007? Everything. Austerity-lots of it for everyone. For public servants this meant penion levy, income levy and USC.
As the article last says she got into trouble last winter and is borne out by stating she is in arrears for 10mths.
Was she stress tested-I would say she was and at @ 5% based on her income, which in 2007, or even 2006 when her application could have been made, would have been expected to remain constant or increase (based on historical data of Public Servant pay). If it could be paid in year one-it shoul dbe payable for the five years-the most expensive years of any mortgage. So she was given the money. Then 3 years in everthing changed for her financially.
Not in defense of her stance, but if she is in genuine difficulties, she should be able to restructure her mortgage, just like everyone else. But the bank says there is a redemption on the remaining fixed rate contract to pay first. On the face of it this seems unfair. If she had 8k -would she want to restructure?
However, I wish she would stop this Professional Public Servant talk- Public Servant seems adequate detail. And as for the €50 per week on clothes and grooming, perhaps she should cut this back in line with the cutback in salary and offer the savings to the bank. I doubt she would loose her job over poor grooming!
 
€50 in clothes and grooming PER WEEK?!
€2,500 per year on this when she can't pay the mortgage?

I agree that she may have standards to maintain in terms of her deportment and personal appearance.
But I'm beginning to form the opinion that centres more about the extra-over due to the fixed rate, which would gall me too.

Is it possible to determine what this persons likely salary range is, Luternau, to give some better background to the dilemma - is that being too prying?
 
It's quite easy to see how she could be €500 pm down from 2007 with pay cuts, tax hikes, pension levy, etc.

She probably should have allowed herself a buffer when taking out the mortgage, but with a fixed rate and a steady job, she would have been seen as a very safe bet.

No point in dwelling on whose fault it is that her disposable income has taken a hit (arguments will range from casino capitalism overseen inept policticians to benchmarking leaving public servants on unrealistic salaries to unsustainably low taxation rates during the boom to overly generous public service pensions that must now be paid for by incumbants).

Is there a chance of her taking in a lodger under the rent a room scheme to close the gap in repayment ability I wonder?
 
thedaras said:
Can I ask why you think that would be the case?
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Is it not obvious? In many cases people scrimped and saved for years to get a deposit to buy their own home, missed holidays, social events, in my own case lived on beans and toast many month ends before the next pay cheque came rather than break into savings. Then spent money making the property a home, plus paying the mortgage each month.
To now have to lose all of that and rent the property off the local authority as a social housing tenant must be a bitter pill to swallow.

Firefly said:
I agree some will. However, for those who bought apartments in bally-go-backwards they must be delighted with the prospect. They get the debt written off and agree to rent the apartment from the bank. 6 months down the road they decide that they would rather rent somewhere else thankyou very much. What happens then? The bank has to write off the whole amount owing to them and the taxpayer again comes to the rescue. Madness.
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I was wondering about this myself - do you get to start over with a clean slate or is part of the scheme that you have to rent that particular property?
 
[Original post removed]

Moderators' note

I think what needs to be said about Caroline Lennon Nally has been said. If someone has some new information to add on her case,by all means please do add it. But please stop discussing her make-up bill, her civil service salary etc.

Thanks

Brendan
 
If the owners of this house can't sell should they be bailed out too?

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and

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Gekko said:
Those who haven't been stung by Ireland's property collapse are coming across as very smug. In most cases, such people have just been lucky - They were either at the right age or stage of their life during the boom.
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Some were lucky, some were wise. Not everyone who is against debt forgiveness is sitting pretty. Some people see it as an ethical issue.
 
bryanod said:
Has anyone mentioned Negative Equity doesn't actually mean anything?

Unless you are selling then it doesn't matter.

It's like complaining your car isn't worth the same once you drive it off the showcourt.
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Cant believe nobody has commented on this - it hought most had finally got their head around this. While technically you are right, i think you've missed a massive point - that being the opportunity cost of your money.

Those that bought in say 2007 with a €1400 mortgage could probably buy with an €800 or €900 mortgage, for example, given a number of avriables. (just an example).

Thats €500-€600 extra p.month to fund a better lifestyle, educate your kids, retire early. Fairly significant i'd say.
 
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