Couldn't agree with you more!
Frontline programme on mortgage arrears and negative equity
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Couldn't agree with you more!
T McGibney
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I thought most of the leading bank executives of the boom years were no longer in their jobs? Am I mistaken?I think it is the fact that thread has been titled 'appalling program' due to the fact that the owner of this site holds a completely different view to that espoused on Frontline has led some of us to feel that this thread is more than a little biased.
I agree Bronte. Just because they are a young couple with a child and not some suave businessman with 20 properties does not mean they are not speculators. They bought with the intention of selling in 2 years for a profit.
I agree.
We bought our current house with the intention of raising our family in it, somewhere closer to my wife's family than we were living.
It'll probably see both of us out, so our only issue is paying the mortgage until then, as opposed to worrying about negative equity.
Does this indicate the reason why people are so exercised about negative equity - they bought into "The Ladder" view of property?
I agree.
Looking over the posts most are on topic and addressing the arguments, but the title of the thread would be improved if the word "Appalling" was removed and then
(i) replaced by "Recent" or
(ii) the the date of broadcast inserted somewhere appropriate
That would return it to the customary unbiased form of thread title we are more used to in serious forums on AAM.
After all, there is a certain irony opining that the programme was biased with this thread title.
A thread that might be more appropriate in The Depths.
To be fair to Brendan, he is usually scrupulous in ensuring that neither bias nor libel creeps into threads or their titles.
I think the true value of the show was to highlight the range of situations in which people believe they are entitled to help. Society needs to weigh up the situation to arrive at a consensus of who should be helped.
My tuppence worth:
Clonee Couple - No one is guaranteed their job and plenty of families live in apartments. Their major problem is that they are feeling sorry for themselves, as long as they are at work they should just get on with it.
Father on the deeds guy - It's a sad situation, but being a guarantor should mean that the combined incomes of the owner and guarantor are taken into account in terms of affordability.
Public servant - I suspect this is a case of having a very nice/saleable house. People who invested a lot of effort & savings into their home need to face up to the fact that all their effort and money has been wiped out. If they're fortunate enough to walk away to rebuild their lives with a mangeable debt, then they should suck it up.
Cork Family - Looks like they will simply not be able to afford to pay the mortgage and have enough left to live on. All the other situations are a distraction from the genuine cases that will require help.
It might be useful to consider the quantum of unaffordable debt that cannot be repaid. Taking the central banks base line stress ratios for both mortgage and personal debt results in loan losses of €13bn. While these are accounting losses they nonetheless are useful when considering the scale and scope of solutions and underpinning agreements required to work out unaffordable indebtedness. These agreements include those dealing with PDH mortgages and those dealing with other debts.
The Kenny programme may have appeared biased as it leant towards the borrower and away from the lender. But it highlighted the plight of tens of thousands of people who have no voice and raised the hare on “debt forgiveness” which has many guises.
The New Beginning proposal looks somewhat complex but nonetheless workable. What’s missing is detail on how the approach would work for a range of scenarios. There are many others – the central principle is cramming down mortgages to affordable levels – they differ on how the non-crammed down element is treated. For example the mortgage debt group report includes a split mortgage option which crams down to 40% of NDI and warehouses the balance –albeit subject to interest capitalising during the warehouse term.
What’s wrong with linking mortgages to affordability? Probably very little – the problem some people have is what happens to the balance.
The Kenny programme may have appeared biased as it leant towards the borrower and away from the lender. But it highlighted the plight of tens of thousands of people who have no voice and raised the hare on “debt forgiveness” which has many guises.
The New Beginning proposal looks somewhat complex but nonetheless workable. What’s missing is detail on how the approach would work for a range of scenarios. There are many others – the central principle is cramming down mortgages to affordable levels – they differ on how the non-crammed down element is treated. For example the mortgage debt group report includes a split mortgage option which crams down to 40% of NDI and warehouses the balance –albeit subject to interest capitalising during the warehouse term.
What’s wrong with linking mortgages to affordability? Probably very little – the problem some people have is what happens to the balance.
If there's been an exodus or a cull, I am not aware of it.
productive
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The bottom line is that if the state is offering write downs/debt forgiveness/ alternative arrangements to connected wealthy speculators and developers, it should be morally and legally responsible to offer the same treatment to the ordinary people.
If the banks had of been left collapse as is the norm for a private enterprise, the current situation would not exist. The moral hazard has already happened in propping up the banks. Giving the ordinary people so leverage in dealing with the banks would be an attempt to correct the situation.
If the banks had of been left collapse as is the norm for a private enterprise, the current situation would not exist. The moral hazard has already happened in propping up the banks. Giving the ordinary people so leverage in dealing with the banks would be an attempt to correct the situation.
These are good points and are why IMO it is impossible to come up with a perfect scheme to help homeowners.
There are supposed to be 300,000 homes in negative equity but 35,000 in arrears. How many of these in arrears are also in negative and by how much? I know of one couple in arrears but not in neg equity.
There are undoubtly some hardship cases and I think the banks can work with these but I also suspect there are many people that in negative equity that want it wiped out just becasue they feel they were duped in some way.
Brendan, one general point about people trading up with negative equity mortgages.
As the the price of houses has fallen, so may the gap between the cheaper 'entry' house as the more expensive types.
For example, in the boom an apartment may have cost 300k and a 3-bed semi 400k. If both of these have fallen by 50%, they are now worth 150k and 200k respectively. However, the gap between the two has closed from 100k to 50k. It is possible that in some cases it would be actually easier for people to trade up if the bank let them move their negative equity.
Brendan Burgess
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The public servant was on the News at One today on RTE.
She is a mother of 1.
She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine)
She bought her house(in Kilkenny I think?) for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007)
She has invested a lot in the house.
She is involved in something called "Irish Homeowners Unite"
She is a mother of 1.
She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine)
She bought her house(in Kilkenny I think?) for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007)
She has invested a lot in the house.
She is involved in something called "Irish Homeowners Unite"
hastalavista
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Could be this lady
http://www.linkedin.com/pub/caroline-lennon-nally/14/906/653
The bit I heard was even less coherent than on frontline
1) But who pays? All you're doing is pitting the pool of taxpayers against the pool of struggling homeowners.
2) Debt is only written off where there is no chance of recovery.
When limited liability development companies go bankrupt the banks have no comeback, there is literally no one the bank can recover money from and therefore it is written off completely outside of the banks control.
If a person manages to declare themselves bankrupt their debt will be written off. That is the equivalent process and represents the same treatment for "ordinary people" as for developers.
Home owners unite on Facebook;
"
This page is dedicated to all those Irish homeowners who are struggling to pay their mortgage and at risk of losing their home.
Description
"If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same".
She was getting lots of compliments on her page.
productive
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DerKaiser. You are ignoring the facts. 100% of NAMA clients have had a debt write-off, for up to 50%. Many are also receiving annuals fees up to 200K and may be paid a % of the future sale. Most will keep their private home and are not being forced into bankruptcy.
I think we all know the average Joe is being treated very different.
I think we all know the average Joe is being treated very different.
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