Repossession is a valid outcome for someone in arrears
- Thread starter bugler
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That wouldn't be my take on it. Roughly 80000 mortgages have been restructured of which 144 are split mortgages and 8 are trade downs - so only 152 (0.19% ) long term solutions have been reached between bank/borrower despite the Central Bank telling the banks to get their act together regarding long term solutions to mortgage arrears !
The way most mortgage arrears in the longer term categories are going to be tackled is via repossession and voluntary surrender. Those are valid outcomes, present in any functioning market.
Removing restrictions on number of contacts per month, removing tracker mortgages from those in arrears, and shortening the time it may take to initiate legal proceedings are definite step towards long overdue repossession/surrenders.
Removing restrictions on number of contacts per month, removing tracker mortgages from those in arrears, and shortening the time it may take to initiate legal proceedings are definite step towards long overdue repossession/surrenders.
Gerry Canning
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Inclined to agree; we need to sort the won,t pay versus the can,t pay.
I would be cocerned that the Banks will focus in on the genuine case where they can squeeze funds rather than the (hopeless) chancer.
It is a tough call, I hope it is balanced and I don,t particularly trust Banks ? I hope there are some ENFORCED checks to keep an eye on Banks ?
They are not valid outcomes for society or the person who wants to stay in their home imo. Most unsustainable mortgages could be made sustainable by a split mortgage. The fact is banks aren't playing ball as indicated by the fact that only 144 splits have been agreed out of 142,000 arrears cases, even though the CB wants banks to introduce more long term arrangements with people in arrears.
Anyone who feels harassed by numerous phone calls form a bank should contact the guards without delay and let them deal with it under the Non-fatal Offences Against The Person Act 1997.
I think it is a perfectly valid outcome for society. Anyone taking out a mortgage does so knowing it comes with certain responsibilities. If you can service your mortgage, you keep your property. If you cannot make any real effort to do so, you can't. If we want there to be any incentive for credit-lending there has to be the ability for the lender to repossess.
How long exactly should someone be allowed stay in their home without making mortgage repayments? 1 year? 2 years? 5 years? A simple answer please. There are a substantial number of people well over a year in arrears. They may have very uncertain prospects of a job. How long should they remain in the house while it is completely uncertain whether they will ever return to work? And should the same not apply to renters? And if not, why not?
This fairy story stuff about how we can accommodate everyone in an unfortunate position with regard to their mortgage isn't helpful to anyone.
Yes people should have acted responsibly when they borrowed, just like the lenders did with their 100% mortgages, 6 and 7 times salary mortgages, 5 year fixed loans so borrowers would pass the more lenient stress tests. And the regulator and Central Bank were happy with this.
Big difference between servicing a €300 k mortgage given out in the mad times versus a €150k split mortgage. There wouldn't need to be repossessions for the most part if banks addressed long term solutions to mortgage arrears but they aren't doing so as the figures indicate.
If banks were serious about long term solutions those solution would be decided within a year. The problem is they aren't as the figures show. I suspect that there are very very few cases where a split mortgage wouldn't suit. Most typical couples will have their children sorted out by the time the parents are in mid to late 50's. Plenty of working time left to sort out the mortgage. For many people lump sums on retirement and inheritance are possibilities too, which could be used to reduce debt.
Rent allowance will keep them in their home if they are out of work.
Neither is turfing them out on the street when they are going to have to be housed anyway.
Gerry Canning
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Bugler; Please read what Demoivre has written . If you take Demoirves musings, Demoirvves comments make a lot of sense.
My feeling on all this, and I think we can agree, is how do we square the circle of Stupid Lending by Banks v Genuine homeowners V People chancing their arm?
My big worry is that WE have the same Bankers to sort it !!! Ugh !!!
My feeling on all this, and I think we can agree, is how do we square the circle of Stupid Lending by Banks v Genuine homeowners V People chancing their arm?
My big worry is that WE have the same Bankers to sort it !!! Ugh !!!
Ah, I see. I had forgot one crucial component of the arrears fallacy. Namely the completely homogenous nature of those in arrears. They, of course, all bought in the boom. Did you know there isn't a single person in arrears who didn't buy 2005-2007? They all have massive mortgages, given to them irresponsibly. None of them bought with any type of deposit. None of them have any equity in their homes.
Also, none of them had any responsibility in falling into arrears. It was entirely down to acts of god, or the economny falling apart. They probably all lost their job or their overtime.
None of them remortgaged to buy an investment property, home or abroad. None of them borrowed to buy a new car, or spent large amounts of borrowed money on holidays.
None of these unfortunate people bear absolutely no responsibility for their circumstances.
I don't claim everyone in arrears acted irresponsibly - but the notion that they played little to no part (bar signing the contracts) is prevalent.
You are sidestepping the question, unsurprisingly. How long should someone be allowed to remain in their property while making no mortgage repayments? There is a substantial number of people who have not made a payment in 1/2+ years. What is your plan for them? Reading your posts it seems like an indefinite moratorium is your solution. With a healty dose of "sure everything will probably be grand in 10 years."
As a renter, you would have zero entitlement to remain in the property if not paying the rent. You would get 14 days notice to pay rent outstanding and then 28 days to vacate. I don't believe there is any obligation on a landlord to accept RS. It is up to the landlord to decide whether they would accept it - and most do not. So as a renter, when you lose your job, or lose control of your finances, you are out of the property in short time. You would be very fortunate to have two months to make arrangements of any sort. You are also relegated to either moving in with family or relying on the state to provide accommodation in one form or another. This it seems, is good enough for the Renting Class.
Repossession is neither good nor bad. It is simply necessary. You can't have a properly functioning property market without it.
Also, none of them had any responsibility in falling into arrears. It was entirely down to acts of god, or the economny falling apart. They probably all lost their job or their overtime.
None of them remortgaged to buy an investment property, home or abroad. None of them borrowed to buy a new car, or spent large amounts of borrowed money on holidays.
None of these unfortunate people bear absolutely no responsibility for their circumstances.
I don't claim everyone in arrears acted irresponsibly - but the notion that they played little to no part (bar signing the contracts) is prevalent.
You are sidestepping the question, unsurprisingly. How long should someone be allowed to remain in their property while making no mortgage repayments? There is a substantial number of people who have not made a payment in 1/2+ years. What is your plan for them? Reading your posts it seems like an indefinite moratorium is your solution. With a healty dose of "sure everything will probably be grand in 10 years."
As a renter, you would have zero entitlement to remain in the property if not paying the rent. You would get 14 days notice to pay rent outstanding and then 28 days to vacate. I don't believe there is any obligation on a landlord to accept RS. It is up to the landlord to decide whether they would accept it - and most do not. So as a renter, when you lose your job, or lose control of your finances, you are out of the property in short time. You would be very fortunate to have two months to make arrangements of any sort. You are also relegated to either moving in with family or relying on the state to provide accommodation in one form or another. This it seems, is good enough for the Renting Class.
Repossession is neither good nor bad. It is simply necessary. You can't have a properly functioning property market without it.
Irresponsible borrowing, of which there was plenty, can only be facilitated by irresponsible lending. The irresponsible lender gets bailed out and the borrower gets offered, in the main, short term solutions such as interest only periods or payment holidays. No long term solutions for the most part as the figures show.
Come to long term solutions with them such as a split mortgage. This could be done in less than a year time frame.
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Never once have I suggested an indefinite moratorium as a solution in any thread. Post a link or be honourable enough to withdraw the allegation. There are numerous specific reasons as to why things might be better for people down the line as previously mentioned.
The main reason a landlord doesn't want rent allowance with new tenants is because of the perception that those tenants will be trouble. It would be an entirely different proposition with an existing tenant, whose standing is good, but who has met with bad times.
You will have precious little of it if the banks agree long term solutions as already mentioned. Lets revisit this thread after the next set of figures are released and see how things have changed.
What use is a split mortgage to a household without income? In the case of a borrower with no or negligible income relative to the cost of servicing their borrowings, and with no immediate prospect of an improvement in income, what is it you are advocating?
And how long should a borrower be allowed stay in a property without paying the mortgage? You have been avoding that question throughout the thread.
Split mortgages are not a blanket solution. And there is a "hopeful" element to them all.
Oh but some people want to avoid that.
Bugler, this repossesion train, which we've been talking about for nigh on 5 years or more ain't coming to town any time soon.
Apparently it costs 50K for a bank to reposses, it's a very very costly long drawn out affair, with anyone, but anyone who goes into court given stays of many months, many times. There was some in the Four courts this week. Adjourned so far 14 times. A loan taken out 10 years ago, 3 repayments ever, house and 2 plots of land, and got a stay of 6 months, easily done if you just show up and if you've kids, even easier. Judge very concerned about school going kids. People not in court but he still gave a stay, asked bank werre there kids, yes, 3, what ages, no idea says barrister.
Long term solutions that the banks aren't interested in as previously discussed. Without any income - who has no income? The FIS guidelines for a couple with 3 kids is €703 a week. Throw a couple , with little income with 3 kids out on the street in Dublin and the rent supplement of up to €1000 per month will have be given to them paid for by the state.
Twice already in the thread I have said less than a year which is a reasonable time frame.
Never said they were. Neither is repossession.
Have you found a thread yet where I advocated an indefinite moratorium on mortgage repayments? Not honourable enough to withdraw the claim?
The unemployed have no income. MIS is meant to be a short term support.
What long term solution is there for those without an income, or anything approaching an adequate income? They form a significant part of the arrears problem. Wait until they get an income? You keep mentioning "long-term solutions" - do you mean split mortgages? What would you call a split mortgage toward which the borrower isn't able to contribute?
At least with applicants for RS there is a requirement that the property be appropriate for their needs.
If you believe someone unable to pay their mortgage should not remain in situ for more than 1 year then perhaps we finally have something to agree on - though 12 months seems quite a long time.
If you read back what I initially wrote ("Reading your posts it seems like an indefinite moratorium is your solution.") It is far from clear to me that that is unreasonable. Pay what you can when you can, and things will most likely improve in time.
It has to. Because people who are not compelled to pay their debts do not pay their debts. Debts are not paid out of duty, or morality. I am not sure I take the 50k figure at face value, though I can see how the costs rack up given a lengthly case. Besides, there are banks who have taken many repossession cases and over relatively modest properties. It was worth it to them. Presumably the 6 specialist judges appointed in the line of the insolvency process will handle some of these cases.
But the main purpose of repossession is that of a deterrent. Marginal cases may need to see that the threat of legal action is real in order to make the decision to make their repayments. It is far better for a bank to organise a voluntary surrender, of course.
Seeing this has now been split into its own thread I believe I should sum up my own opinion.
1. Where a realistic solution that keeps people in their property can be made it makes sense to do so, for the bank as much as the borrower. However, realistic solutions are not effectively forebearance measures. And I note from the CB statistics that a significant minority of restructured agreements are not kept to, even in the relative short-term.
2. It is not a positive outcome for people who cannot or will not make repayments on their mortgages to retain their properties for anything over 4-6 months. Even ignoring the state-owned banks angle, forcing costs on banks is to the detriment of banking customers generally. It is likely to mean increased costs elsewhere, and a lack of competition. Tesco declined to enter the Irish lending market, and I can see why.
3. There is an oversimplified attitude to those in arrears from the public, media and political representatives. There is an assumed homogenity (they are presumed to have bought in the boom and are in severe negative equity). They are typically and unquestioningly painted as victims of circumstance. Most people, and particularly media and political figures, are terrified of stating what is obvious - some of those in arrears are there because they have made very poor financial decisions, or have let their spending spiral out of control, lived beyond their means, failed to balance the books etc etc. There are enormous levels of personal debt run up outside mortgages that indicate this.
4. I don't think the full extent of the arrears problem is yet acknowledged. To be honest, I don't think the banks/CB statistics tell the full story. I think it is worse than stated, and I think this is a natural result of a "no repossession" policy adopted by the banks and government over a number of years.
Eventual this has to be tackled and repossession has its natural part to play.
Gerry Canning
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Bugler; I don,t think anyone disagrees that Repossession has a natural part to play.
Given the Stupendous size of the problem .
Given the False priming by Banks.
Given (commit suicide) on any naysayer.
Given most people believed Banks that all is upward and onward.
Given the sad reality of job losses.
Given the 64 Billion , you and I were conned of and went to Banks.
Given these people are my good neighbours.
Given most are genuine.
Given we Capitalized Banks to take losses.
Given their self-serving holding of this capital
Given that a Hard Repo would completely wreck our economy.
I now contend that Banks inactivity has AGAIN left them winning and us Idiots asking Questions.
I agrred with you at the top of this thread and agree at the end (eventually this has to be tackled)
Sermon over!!!
Regards Salmon.
Given the Stupendous size of the problem .
Given the False priming by Banks.
Given (commit suicide) on any naysayer.
Given most people believed Banks that all is upward and onward.
Given the sad reality of job losses.
Given the 64 Billion , you and I were conned of and went to Banks.
Given these people are my good neighbours.
Given most are genuine.
Given we Capitalized Banks to take losses.
Given their self-serving holding of this capital
Given that a Hard Repo would completely wreck our economy.
I now contend that Banks inactivity has AGAIN left them winning and us Idiots asking Questions.
I agrred with you at the top of this thread and agree at the end (eventually this has to be tackled)
Sermon over!!!
Regards Salmon.
Split mortgages are not a solution. They are a can kicking exercise and can kicking exercises are a large part of the reason why we are in the position we're in today.
Part of the problem, perhaps the major part of it, is the system is not attractive for a landlord. The landlord has very little protection against loss and damages or overholding. Its paid in arrear, and often tenants don't pay a deposit from their own money.
Which is more useful to the economy/Govt. Keeping people in their own houses or paying them to be repossessed, and end up paying for them in rental accommodation. The loses incurred by the bank, end up being borne by the govt in the long run. It makes it more attractive for people to default and even emigrate, than staying with their own house. Which narrows the tax base yet further. Kinda eating your own tail no? Is it not better to keep people in their own homes which they will maintain, rather than to leave them empty and for them to fall into disrepair and devalue them even further. That said if the govt pays the rent it should gain some equity in the property.
Could the people who keep on saying "we'll have to pay to accommodate people anyway after we make them homeless" please provide some statistics on how many of those with unsustainable mortgages cannot afford any kind of rental accommodation. Or is there any special reason why someone who cannot afford to pay for the house they bought should get to keep it, while those looking to enter the market stay priced out of it because of the lack of sales?
Let's try the following thought experiment. Since the banks have to do something about mortgages which aren't getting paid, how about the government pays the mortgage for anyone who for whatever reason isn't paying it themselves? Like you say, we have to pay for them somehow anyway. Now how does it feel paying the mortgages of people who can't afford their houses, while those unlucky enough not to have bought overpriced accommodation get nothing? Because that is in effect what's happening right now.
Let's try the following thought experiment. Since the banks have to do something about mortgages which aren't getting paid, how about the government pays the mortgage for anyone who for whatever reason isn't paying it themselves? Like you say, we have to pay for them somehow anyway. Now how does it feel paying the mortgages of people who can't afford their houses, while those unlucky enough not to have bought overpriced accommodation get nothing? Because that is in effect what's happening right now.
Yes.
Example: unsustainable mortgage, too high, at 1500 pm, on huge debt. Can't afford it.
But can afford 750pm rent on similar or smaller house nearby.
Not homeless, not dependent on the State.