"Homeowners to get help" Eamon Ryan

Brendan Burgess

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Legislation should be brought in to make the lending institutions pay for their profligate selling of money.

In this case, no mortgage payments to be sought until the economy recovers AND unemployment falls by a minimum amount, say 20% of the current figure.
That will leave people money to live on if their partner or they have lost work and it'll help the economy get back on track by instantly improving liquidity.
Better still, it will take the stress away for a while to stop families tearing themselves apart as we've seen in recent postson AAM.

And finally it'll give a good boot up the behind to those lending institutions holding back the recovery by not lending money.
WIthout income from mortgages to pro them up, they'll have to lend ot businesses to make their money.

The way things stand all we're doing is propping up failed institutions so that people with deposits or bondholders don't get wiped out.
The people who bought into the property-owning culture are seeing their life's desicisons erased and their investments wiped out
This lays the ground for a whole generation of alienation and social upheaval and some UCD Professor writing books on it.
I think the banks have had all the kid gloves they need - time to help pay for what they did and help Ireland Inc recover.

If the Average Mortgage is €12 k a year [guessing] and there are 500,000 mortgate holders [guessing again], that's 6 Billion a year.
Lots of pain to spread around to all the institutions who have been bailed out.
This isn't giving people money, its just keeping it in their pockets.
With money being spent instead of sucked up by institutions.
Money being spent = economy recovering.
Am I missing something?

ONQ.
 
This has sent my scepticism radar to tipping point. It smells like FF have thrown the Greens a bone to assist in upping their poll numbers.

However, there's little doubt something is needed and based upon some of the posts on here, we cannot rely on the voluntary aspects of the banks engaging with those struggling with debts and finding a more reasonable outcome. Although Judges do seem sympathetic to debtors when it gets to court, the banks seem determined to get it to court. One suspects this is a deliberate ploy in order to get as much on the NAMA books as possible.

But then isn't this what the LRC's consultation was about to some extent?
 
Well, we've had NAMA for the big guys; now let's give everyone in the audience one. Sure, we're awash with money. How about a tax break for those of us who didn't join in the bubble frenzy?
 
onq said:
Legislation should be brought in to make the lending institutions pay for their profligate selling of money.
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In what sense do you think they're not paying already? For a large proportion of performing loans (tracker mortgages) the banks are making a loss. The non-performing are by definition loss making. The original sales people who got their bonuses made out like bandits but the lending institutions are bankrupt. In what sense do you want them to pay - morally?

These points are mutually exclusive. Banks can't lend what they don't have. If loans aren't repaid they can't be lent out again. This is why banks aren't lending - because we're in the middle of a recession and people are no longer paying back their loans.

Reckless lending is what got us into this position. It was reckless in that the banks were lending money they didn't have on their deposit sheets, using inter-bank lending to finance your sauna/jacuzzi. What you're advocating is a return to those policies.

onq said:
Am I missing something?

ONQ.
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IMO, everything.

I don't know the correct solution. It's doubtfull whether these "Green" proposals will work as, for the most part, they avoid the problem rather than solving it. The likelihood is that there's no correct solution, just a lot of pain till these debts are paid down or written off (and paid for by the tax payer).
 
Fine idea.

Anybody who avails of this can then pay a higher rate of tax say 50-60% for the rest of their life with reduced social welfare and pension entitlements.


Wouldn't be fair to ask those who were financially prudent to pay for others foolishness.
 
canicemcavoy said:
Well, we've had NAMA for the big guys; now let's give everyone in the audience one. Sure, we're awash with money. How about a tax break for those of us who didn't join in the bubble frenzy?
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Sorry, no breaks for anyone who was responsible.
 
jhegarty said:
Sorry, no breaks for anyone who was responsible.
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You know, I'm not asking for much. Not for money, not for bailouts. Just for a few mea culpas from the people who got it spectacularly wrong and called the rest of us hysterical. Sorry is indeed the hardest word.
 
A debt for equity swap would involve just the the delinquent bank and the sinking borrower.
 
One things for sure, all you "let them suffer" merchants aren't going to help solve our problems. Whether you like it or not, we're all in the same boat so sticking your head in the sand won't help. Our economic recovery is dependent on helping a huge amount of people that are struggling with mortgage and non-mortgage debt. Most people are quite willing to pay back every cent they owe but they need more flexibility from the banks and if they won't help voluntarily then the government should step in to make sure it happens. Possible solutions could include extending mortgage terms or getting banks to roll-up existing short-term facilities into mortgages e.g. if you have a personal loan, cc and mortgage with a bank then their credit exposure is no different if they re-mortgage for the total amount and reduce the borrower's monthly repayments.
 
So what's to stop those people getting new short-term loans and/or credit cards after the consolidation.
 
cartman1 said:
One things for sure, all you "let them suffer" merchants aren't going to help solve our problems. Whether you like it or not, we're all in the same boat...
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Er, no we're not. I love the chutzpah of this argument:
  • House prices rise: homeowners think, "what a clever boy am I", keep all the profit to themselves
  • House prices fall: homeowners wail, "HELP US! WE'RE ALL IN THIS TOGETHER!"
 
If you have even a simple grasp of how economy works then I think you'll find you are in the same boat. Anyway, who's wailing???
 
I think it's a disgraceful suggestion. For one thing the government does not have the money to be bailing people out.

Secondly, and more frighteningly, it sends out the wrong signal. People who are having trouble paying their mortgages see this and think they're going to get a "Get out of mortgage free" card. Then they will stop making repayments or missing repayments so that they well be well placed when some sort of scheme is in place.
 

Whether you like it or not, homeowners will have to be bailed out to some extent.

I wouldn't be in favour of blunt instruments rather a staggered level of intervention.

I believe anyone with the income or savings to pay should continue to pay regardless of negative equity, etc.

We need a range of innovative measures for those who simply cannot pay including restructuring of loans (which the banks are already doing) and perhaps shared ownership where the banks take a share in the property (e.g. take 25% of the property to reduce mortgage repayments by 20% if a property is valued at €200k with a mortgage of €250k).

The government need to support these measures and possibly will have to subsidise them to some extent. This problem is not going to just go away.

As for those who kept their heads down during the bubble, did you ever ask yourself how much you have contributed to the economy?

I'm not having a go at anyone but I would directly link the stamp duties paid in the last decade to the reduced level of income taxation and higher levels of public sector pay.

I think those levels of stamp duty were correct at the time given the irrationality in the market, but let's not forget they have found their way back into many people's pockets through reduced taxation. We cannot ignore the billions collected during the boom, primarily from the very people who are now in trouble, when we are considering the fairness of who should subsidise whom
 
DerKaiser said:
As for those who kept their heads down during the bubble, did you ever ask yourself how much you have contributed to the economy?
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I'm sorry but that's a preposterous statement. The tax intake from Stamp Duty, VRT, etc was gained on credit and led to the disaster we're in. I agree with helping those in difficulty, but to say that their method of purchasing and financial management shouldn't be criticised because they contributed more to the economy is ridiculous.

I didn't partake in the State Pyramid Scheme of Finance so while the tax take from my spending may well have been less, overall it's saving the economy because I'm in danger of defaulting on my mortgage and so don't require bailouts or state support. I would argue strongly the net effect is I've contributed more as result.

60% of people who own homes have no mortgage, so aren't in trouble, and then of the 40% left, what proportion are in real trouble (not just negative equity)?

I completely agree there will have to be some move on this to assist people and naturally there will be a cost. But this is a debate on the morality of whether we allow people to struggle and if not to what extent the state can be of help. Let's not try and justify the egregious credit binge by claiming they contributed more to the economy. It won't stand up to analysis and quite right some people like myself do wonder why when we approached life with common sense and some foresight, we'll be the people hit hardest for taxes and paying for it all. I think it only fair that we get to have some say in the extent of any help.
 
Mind boggling, self serving, piece of logic.

I'm pretty sure you could bottle that and use it as justification for just about anything you pleased.

1. Senior bankers receive bonuses during boom.
2. Said bankers pay tax on their bonuses and spend the rest on champagne and caviar.
3. If only we had more of those lads we wouldn't be in the mess we're in now as their high wages and fiscal irreponsibility are what we need to get us out of this mess.

Blaming the bust on those who had some sense - well that's a new on me. Very Orwellian.
 
cartman1 said:
Whether you like it or not, we're all in the same boat so sticking your head in the sand won't help.
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We weren't all in the same boat when the people being bailed out were making huge profits at minimum tax and spending it all on themselves. I'd have loved to be in the same bloody boat then , a yacht was it ?
 
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