Frontline programme on mortgage arrears and negative equity

[Gekko]

How is it not true? Like you said they wanted to get 'on the property ladder' not buy a home for life. They openly admitted they planned to stay two years then get a house.

How do you think they thought they'd do that?

That's pretty obvious. What did any young couple think they'd do?

They bought the apartment with the intention of trading up down the line when their circumstances permitted it. In a functioning economy where house prices rise gradually over time (or in our Celtic Tiger boom), the apartment would have appreciated in the interim but the house that they want would have appreciated even more (so in effect, they'd be worse off - they don't make a killing).

I know lots of couples who are now stuck in apartments that they only saw themselves in for a few years. None of them bought the apartments to make money - They bought the apartments with the intention of losing money! In an ideal world, they'd have bought a house in 2005/2006 but they couldn't afford one. Renting is not at all straightforward in Ireland compared to other jurisdictions. They therefore bought apartments as interim measures which they're now stuck with. Something should be done to facilitate these people, e.g. allow negative equity mortgages for those trading up, force lenders to include the rental income in the affordability calculations or make the tax position for such people more favourable.

 

[Sunny]

No offence to anyone here but the only people talking an universal debt forgiveness are people here ranting against debt forgiveness and some lunatic organisations that have been set up around the place. 99.9% of the people I have seen on AAM talk in favour of some sort of debt forgiveness and I use that term loosely are not advocating a free for all scheme for everyone who bought a house during the peak.

Maybe all the smug people who didn't buy in the peak, haven't lost their jobs, haven't had large pay cuts, and have never made mistakes in life can set up their own thread and can discuss how great they are between themselves.

 

[Gekko]

And whats wrong with being smug? Were the speculators/buyers not smug at the time - telling us over dinner how their house has gone up €10k since last Friday. Shoe and other foot spring to mind.

Why should resposible individuals who didnt hop on the so called ladder during the boom because they didnt think they could afford it using proper economic fundamentals such as times salary pay even higher taxes (again) to help out these people.

Whats worse is there is many who bought in 2005,2006 and 2007 who were warned on here and the Pin and Boards about not doing so yet wouldnt listen/didnt care.

Frankly, I don't believe that such people exist. The country is fool of spoofers right now pontificating about how they didn't get involved in the property frenzy during the early to mid 2000s. In my view, they are complete spoofers. They probably already had a suitable home.

I'd argue that the people most upset are those who have been stung but are coping.

It would be bad enough to have stayed out of the property frenzy and end up paying for it, but you don't want to end up paying for both your own mistake and the mistakes of others in the same position as you who won't make an honest effort.

A person could be in a situation where their savings are gone and half their earnings are gone in mortgage repayments. It's a tough situation but you can plough through, not beat yourself up about it and try get on with living life. It's tougher to see others in the same situation moaning about it and looking for a free handout because (a) despite coping it still prevents you from moving on your own mistake and (b) you know the handout they are looking for can only come from your pocket in the form of higher taxes.

We're all hard pressed. Bailing out 10,000 people with no hope of paying their debts is manageable. Attempting to bailout 200,000 people whose high expectations of life have been hit by falling property prices would destroy us all.

I've lost a fortune during this collapse and will receive no bailout from anyone. I'm just rebuilding myself. But I acknowledge that others should get help. That young couple from Clonee should be facilitated and allowed to move to a suitable house.

Some were lucky, some were wise. Not everyone who is against debt forgiveness is sitting pretty. Some people see it as an ethical issue.

"Ethics" are a red herring.

People with investment properties should be left to blow in the wind.

Young couples stuck in apartments should be allowed to trade up and take their negative equity with them.

People who can pay a portion of their mortgage should have the State/bank take an interest in their home.

Hopeless situations with no income should be allwed to send "jingle mail".

We need action today, not the results of more wordy studies with no action for at least a year.

 

[monagt]

Perhaps a poll should be taken in AAB with perhaps 4 options:

1. No DF of any Kind
2. Partial DF based on Debt and Current Price of House and currents state of Household
3. Partial DF based on Debt and Current Price of House
3. Full DF - a free for all

It would allow people to Vote and not rant on and on

And it would give an indication of where this board stands in relation to MONEY and Social Policy

 

[kennyb3]

Frankly, I don't believe that such people exist. The country is fool of spoofers right now pontificating about how they didn't get involved in the property frenzy during the early to mid 2000s. In my view, they are complete spoofers. They probably already had a suitable home.

Maybe you should look at other sites, there are many who openly admitted they were selling a family homes because they thought prices had got crazy and were going to rent for a while. I'm not saying the country was full of them but there were plenty.

As was mentioned earlier on this thread another site spawned up as negative comments on the property market werent welcom here. This was being discussed by some in 2004 and 2005 long before phrases like negative equity were even coined. So you can believe what you want.

PS And im sorry to hear of your troubles. I have friends and family who are in a similar position.

This is not personal but a counter arguement should also be made.

 

[Gekko]

No offence to anyone here but the only people talking an universal debt forgiveness are people here ranting against debt forgiveness and some lunatic organisations that have been set up around the place

Agreed.

No credible people advocate universal debt forgiveness.

Each case must be looked at by an objective agency and a bespoke solution must be formulated for each case.

Take that couple from Clonee. Their apartment is not fit for purpose and they need to move to a house. There's no point in them approaching their bank with a common sense proposal to square the above circle. An objective agency needs to examine the proposition and have the power to compel the bank to act.

 

[Gekko]

Maybe you should look at other sites, there are many who openly admitted they were selling a family homes because they thought prices had got crazy and were going to rent for a while. I'm not saying the country was full of them but there were plenty.

As was mentioned earlier on this thread another site spawned up as negative comments on the property market werent welcom here. This was being discussed by some in 2004 and 2005 long before phrases like negative equity were even coined. So you can believe what you want.

A few anonymous posters claiming to be short selling hardly constitutes "plenty".

We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard. Why is it so different with helping distressed property owners? We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.

 

[Sunny]

We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard. Why is it so different with helping distressed property owners? We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.

Good point. Giving child benefit, medical card, pension to someone that doesn't need it is more ridiculous to me than helping someone who is honestly struggling to pay their mortgage and yet no one is ranting against that.

 

[DerKaiser]

Take that couple from Clonee. Their apartment is not fit for purpose and they need to move to a house. There's no point in them approaching their bank with a common sense proposal to square the above circle. An objective agency needs to examine the proposition and have the power to compel the bank to act.

I'm not sure at all on this one.

They definitely shouldn't get a handout as they can afford the mortgage and a reasonable lifestyle.

They are a high risk for additional debt, so in their case I'm not sure trading up is an option.

Are they really badly off where they are? If they really wanted another kid they would be cramped but there are families in a lot worse conditions.

It's also been said here already that they could rent out their own place and rent a larger place for themselves for a reasonable additional monthly outlay.

Like almost everyone else I'm against debt forgiveness unless it is necessary.

Of the examples trotted out on the frontline, none were necessary or deserving of debt forgiveness. I despair that these people think they are deserving of having their debts paid for them out of other hard pressed people's money.

By and large they were looking at less confortable lives than they had planned, but none of them were actually ruined. I would be appalled if these were the people presenting themselves to an objective agency for handouts when renting out a spare room or renting their own house out whilst renting somewhere larger themselves would solve their problems.

 

[kennyb3]

A few anonymous posters claiming to be short selling hardly constitutes "plenty".

We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard. Why is it so different with helping distressed property owners? We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.

Yeah you can use anonymity to undermine it, but it was called before others had the sense to. personally id call it plenty but we can agree to disagree.

I see what your trying to get at in your second posts - so what do you do create a class divide based on education? What constitutes a distressed owner? The lady with the 1m mortgage - how are you going to distinguish?

Good point. Giving child benefit, medical card, pension to someone that doesn't need it is more ridiculous to me than helping someone who is honestly struggling to pay their mortgage and yet no one is ranting against that.

This is prob the most incredible post i ve ever read - do you not see the difference between helping the most vulnerable - children and OAP's,feeding them and putting clothes on their back as against helping someone who took a calculated risk and got it wrong?

If its simply the dont need it part your arguing - well everyone will agree with that - that only means it should be means tested - 2 wrongs dont make a ...

Campaign for means testing so

Is your arguement everyone else gets something why cant we?

To be honest i ll bow out now with how rapidly downhill this is going. im seriously scratching my head here

 

[Sunny]

This is prob the most incredible post i ve ever read - do you not see the difference between helping the most vulnerable - children and OAP's,feeding them and putting clothes on their back as against helping someone who took a calculated risk and got it wrong?

Do be honest i ll bow out now with how rapidly downhill this is going. we?

Why don't you read my post again before vanishing into a pit of despair? My argument is against universal benefits. Do you know how much we spend giving child benefit, state pensions and medical cards to people who do not need it?

I have no problem giving money to people who need help but I dont see the difference between someone honestly struggling to pay their mortgage and someone who keeps getting pregnant and expects the state to support them. (and sorry for using that as an example but you get my point).

 

[kennyb3]

Why don't you read my post again before vanishing into a pit of despair? My argument is against universal benefits. Do you know how much we spend giving child benefit, state pensions and medical cards to people who do not need it?

I have no problem giving money to people who need help but I dont see the difference between someone honestly struggling to pay their mortgage and someone who keeps getting pregnant and expects the state to support them. (and sorry for using that as an example but you get my point).

I hadnt finished my post as you ll see, i hit submit by accident, then edited it immediately. Well then campaign against benefits and fraud then. The reason i think this is going downhill is because its a) going off topic and b) more importantly descending into a 'they get it why don't i type thread'

 

[Sunny]

I hadnt finished my post as you ll see, i hit submit by accident, then edited it immediately. Well then campaign against benefits and fraud then. The reason i think this is going downhill is because its a) going off topic and b) more importantly descending into a 'they get it why don't i type thread'

But I am not the one campaigning against a targeted scheme to help people who are genuinely struggling with their mortgage. You are. I am simply pointing out that the State is paying millions if not billions every year to people in similar schemes with different names to debt forgiveness.

I am not in anyway in favour of debt forgiveness by the way but we have a problem and we have to deal with it. Allow people to go bankrupt, pay what they can but allow them to start again is the cleanest, simplest and most effective way of dealing with this. That does not mean you should be allowed to rack up debt, declare yourself bankrupt and forget about it.

 

[ajapale]

Please use the report post facility if you think a post or part of a post is off topic. Claiming that posts are off topic are in themselves off topic.

Some OT posts and parts of posts deleted.

Frontline programme on mortgage arrears and negative equity

 

[onq]

I saw the programme.

She wasn't happy at having a bank employee give her grief over spending €50 per week on work related grooming. The question is not whether €50 a week is excessive. I think when you analyse it, it's not excessive but it's certainly inflammatory in a discussion such as this.

I do not think it's appropriate for the bank employee to give the woman grief over that level of spending.

(nods)

Anyone who's ever had to make a presentation to the bank knows how annoying/embarrassing/intrusive it can be.
Let's move on from that distraction, which is all it was.
I also posted -

The point is that she looks like she cannot pay her mortgage after 2012.
I'm not smug about it but it puts her current concerns into perspective.

Is this not the very essence of the original post?
That emotive ,bordering on biased, presentations are masking the underlying issue?

In the case if the lady who claims she cannot pay a €1,400 mortgage this appears as though it has nothing to do with -

- the Irish banking crisis
- the state of the world economy, or
- the several "hits" taken by the public service.

In that case it looks like there was going to be a default on the mortgage as soon as the "interest only" period stopped.
Nothing was going to stop that happening so I say again, we're not getting the whole picture here, either from the article or the programme.

 

[Brendan Burgess]

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. Overall this thread is raising important issues. Please stay on topic. And please calm down a bit. If someone posts something inappropriate, ignore it or report it. Don't let fly at them.

 

[Purple]

I am not in anyway in favour of debt forgiveness by the way but we have a problem and we have to deal with it. Allow people to go bankrupt, pay what they can but allow them to start again is the cleanest, simplest and most effective way of dealing with this. That does not mean you should be allowed to rack up debt, declare yourself bankrupt and forget about it.

I agree.
BTW I'm also against universal benifits

 

[Sunny]

Brendan is right. It is not fair to pick on one individual without knowing her. AAM is not hello magazine. Post comments on her facebook page if people want.

 

[44brendan]

Are we looking to light a candle here or just cursing the darkness and prioritise the allocation of blame? I acknowledge that as a banker I approved a number of loans with high LTV and a marginal repayment capacity. Was this due to incompetence, carelessness or greed? I wasn't paid any performance bonuses and nor did I try to push through loans that were below an acceptable standard. While I agree that the Anglo style lending model did cause Banks to revise their credit standards that in itself would not have led to the current mortgage crisis. There are certainly a significant number of examples of people who were advanced mortgages they patently could never afford to pay back but these would not be the primary root behind the current arrears problems. From an examination of the financial circumstances of those who are currently in mortgage difficulties most have significant levels of other debt such as maxed out credit cards and credit Union loans in addition to their mortgage. It is the difficultly of meeting these loan repayments that predominately have ld to mortgage arrears.
I am in favour of a measured solution that does involve an element of debt write-off/postponement and to a large extent most Banks will not take a major hit on this as losses have already been provided for. However the difficulties around the application of this type of solution is how to measure the criteria for eligibility for this type of solution. If the Banks do indicate debt postponement or write-off availability, then many of those who are currently meeting mortgage repayments (probably including myself) will join the line for relief. This raises a high potential for further arrears and banking difficulties. I am not holding any candle for the Banks on this issue but there is a general fear of contagion on loan arrears which could end in all of us picking up the tab. It's going to be difficult to come up with an appropriate solution that permits people to extricate themselves from these problems but at the same time maintains the risk profile on the balance of the book.

 

[onq]

44Brendan,

How can you say

"I approved a number of loans with high LTV and a marginal repayment"

then

"... nor did I try to push through loans that were below an acceptable standard"

then

"From an examination of the financial circumstances of those who are currently in mortgage difficulties most have significant levels of other debt such as maxed out credit cards and credit Union loans in addition to their mortgage. It is the difficultly of meeting these loan repayments that predominately have ld to mortgage arrears."


Where was the checking procedure that would have uncovered these "other debts" and given the lie to applicant's projected ability to pay?

Was it in place but the people concerned deliberately misled the banks?

Was the question of "other debt" simply not addressed, assuming the mortgage would be given primacy?

And in the context of the disaster we are all in, what defines "acceptable standard".