Repossession is a valid outcome for someone in arrears

You reckon people will downsize and pay off the balance of the mortgage debt they'll be left with, for the next 20yrs because the bank won't write it off.

Instead of emigrating and leave the state to pay it instead. Which will be in taxes on the person who's buying now.

If you think buying the house is the hard part now. You may have to rethink that as they bring in every charge and tax known to man and the easy target is the property owner who can't liquidate and move rapidly.
 
AlbacoreA said:
You reckon people will downsize and pay off the balance of the mortgage debt they'll be left with, for the next 20yrs because the bank won't write it off.

Instead of emigrating and leave the state to pay it instead. Which will be in taxes on the person who's buying now.

If you think buying the house is the hard part now. You may have to rethink that as they bring in every charge and tax known to man and the easy target is the property owner who can't liquidate and move rapidly.
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I'll take my chances on possible higher taxes at some possible time in the future if it means repossessions finally get started in this country.

Do you all really think if people are allowed to stay on in their now unaffordable houses (even the very large % that can afford to pay but are now refusing to, and this cohort appears to be growing as word spreads), that this won't mushroom into a much bigger problem than having to pay for the housing of a % of those that will be repossessed?

As Dub_Nerd said...not everyone who will be repossessed will be in need of social housing.

Bring it on and gets this housing mess sorted for once and for all
 
+1. There will have to be debt writedowns for people who genuinely can't pay. That's unavoidable and that is something we're going to have to pay for. But the decision as to what a person can or can't pay should properly be the result of a legal process, and the person who benefits from a debt write-off cannot retain the asset.

Btw, charges and taxes resulting from new bank losses will pale into insignificance compared to the ones that will be needed to pay for the billion a month that we're overspending at the moment.
 
Whats their incentive to say and contribute, if you leave them with a large debt after the write down and kick them out of their home which they may have already put large sums into. Ok they can't retain the asset, but some equity in it would be a carrot to stay. Otherwise, they start building a war fund, to travel with. Which is what I assume they are doing.
 
Delboy said:
I'll take my chances on possible higher taxes at some possible time in the future if it means repossessions finally get started in this country....
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Its a certainty and not some distant future either. Its here now.

Will flood of repossessions really help. In the US theres been suggestions that principal reduction vs foreclosure is a much less of a hit on the tax payer and thus the economy.
 
AlbacoreA said:
Its a certainty and not some distant future either. Its here now.

Will flood of repossessions really help. In the US theres been suggestions that principal reduction vs foreclosure is a much less of a hit on the tax payer and thus the economy.
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This is Ireland....it should be a certainty that they will start but I have a fear it'll be a fudge and the mess carried on far into the future.
So until I see repossession rates running at a few hundred a month, initially at least, I won't believe it
 
So what this is Ireland. Its the idea that Ireland is somehow "different" got us to this point.
 
AlbacoreA said:
So what this is Ireland. Its the idea that Ireland is somehow "different" got us to this point.
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That's the point I was making! We are'nt different but we are certainly acting that way with the practically non-existent level of repossessions we currently have
 
AlbacoreA said:
Whats their incentive to say and contribute, if you leave them with a large debt after the write down and kick them out of their home which they may have already put large sums into. Ok they can't retain the asset, but some equity in it would be a carrot to stay. Otherwise, they start building a war fund, to travel with. Which is what I assume they are doing.
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If they leave the country we don't have to pay rent for them. As I said, writing down or writing off the debt will be appropriate in some cases, not in others. There isn't, and shouldn't be, a blanket solution. It's in the bank's interest to work with the customer to find a solution that involves keeping the house. That way the bank doesn't have to book losses now, which it does in the case of a repossession and firesale, and that looks better on the bank's balance sheet. The only thing to be avoided is the bank using the same rationale to "extend and pretend" as they have been doing, where the mortgage is unsustainable. In that case, a resolution is needed and in some cases it must involve repossession.

The other reason why repossessions need to start is because of the moral hazard of strategic defaulting. Anyone with their wits about them knows this is a factor. Look at Ulster Banks investor statement the other day, look at the Allsop auction "protestors" yesterday, look at numerous threads on askaboutmoney.com about how to avoid paying mortgages even where affordable, or seeking mortgage "deals". I'm as critical of the banks as the next man, but it doesn't mean I fancy paying his mortgage.
 
if the mortgage is unsustainable is paying for it not unavoidable. either as a loss to the bank if they default. or in some form of write down or assistance payment. the govt pays either way.
 
Not in disagreement with Dub nerd on a lot of points.
The MAIN issue is how we Mr Citizen get out of this mess @ least cost ?
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Of course Ulster Bank statement said 35% strategic defaulters. I can,t see 35%. Since when were Banks truthful? I know there is some % of chanchers.
The Allsops (protest) is a sad manifestation of the potential civil disturbances we may have if Government permit Banks to keep driving in an erratic manner.
I have carefully read the NOT Wanting to pay brigade. I don,t read most posts as NOT wanting to pay ,but a sad desperation of the hole they are in.

A long time ago I was taken with the proposition that people repay 35% of disposable income on troubled mortgages .
Could that not be a starting point , and would it not give the genuine, some breathing space and would it not ,flush out the chanchers.?
 
salmon9077 said:
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.
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How would repossessions wreck our economy?
Those properties would become available for others to take.
Instead of young couples building savings, they might be able to buy instead.
Property values would decrease, bringing more people into the market.
 
I agree Repos would free up properties.
I agree young couples might buy.
I agree property values would decrease.

..............................................
If a LOT of Repo,d property floods the market , prices will fall well-shy of their real value.And Since WE own these and the Debt on them , by selling at a very low cost ,we taxpayers take another hit. We can see this happening in the Commercial Property Market , funds are buying in cheaply , we will take the hit on these comercial mortgages. Cash rich VULTURE FUNDS would love to buy our houses in a fire sale.
When things stabilise(and they will) properties can be sold at a reasonable value.

If we could keep Repo sales within our population eg the young couples ,I can see merit in your comments.
I have NO DOUBT that if there are a lot of Repos that the large purchasers will be the 2013 equivalent of the Carpet Baggers !!
 
jman0war said:
How would repossessions wreck our economy?
Those properties would become available for others to take.
Instead of young couples building savings, they might be able to buy instead.
Property values would decrease, bringing more people into the market.
Click to expand...

I have a hunch a lot of them will be in areas/or properties that people won't want to move to, rather than desirable areas or properties. Only my guess. Also these are effectively a further loss to the bank they will become even less willing to give out loans, or facilitate people buying. It may actually make it harder Unless you are a cash buyer who can buy to speculate.
 
salmon9077 said:
Not in disagreement with Dub nerd on a lot of points.
The MAIN issue is how we Mr Citizen get out of this mess @ least cost ?
........................................................................................
Of course Ulster Bank statement said 35% strategic defaulters. I can,t see 35%. Since when were Banks truthful? I know there is some % of chanchers.
The Allsops (protest) is a sad manifestation of the potential civil disturbances we may have if Government permit Banks to keep driving in an erratic manner.
I have carefully read the NOT Wanting to pay brigade. I don,t read most posts as NOT wanting to pay ,but a sad desperation of the hole they are in.

A long time ago I was taken with the proposition that people repay 35% of disposable income on troubled mortgages .
Could that not be a starting point , and would it not give the genuine, some breathing space and would it not ,flush out the chanchers.?
Click to expand...

Just to note -- the Ulster Bank chief risk officer said that 35% of mortgage holders in arrears over 90 days were paying zero toward the mortgage. Anyone who has lost their job and is living on welfare with no other household income is hardly able to contribute more than zero, so strategic defaulting is probably a small minority. Nevertheless, if you make repossessions impossible and give the impression that all those claiming difficulty in paying will get a write-down, then you create a strong incentive to pay less than you're able to.
 
salmon9077 said:
I agree Repos would free up properties.
I agree young couples might buy.
I agree property values would decrease.

..............................................
If a LOT of Repo,d property floods the market , prices will fall well-shy of their real value.And Since WE own these and the Debt on them , by selling at a very low cost ,we taxpayers take another hit. We can see this happening in the Commercial Property Market , funds are buying in cheaply , we will take the hit on these comercial mortgages. Cash rich VULTURE FUNDS would love to buy our houses in a fire sale.
When things stabilise(and they will) properties can be sold at a reasonable value.

If we could keep Repo sales within our population eg the young couples ,I can see merit in your comments.
I have NO DOUBT that if there are a lot of Repos that the large purchasers will be the 2013 equivalent of the Carpet Baggers !!
Click to expand...

You're basically arguing for interference in the housing market to make sure prices don't fall below what you are arbitrarily calling their "real" value, and that sales should be restricted to certain people with investors excluded. That sort of strategy has got us in the mess we are in, with credit completely frozen up and no sign of an improvement after five years. Remember the NAMA concept of "long term economic value", how property only had to "recover" by 10% in 10 years for them to break even? What is it, a 30-40% decrease since then? We're going to take another hit on the banks, and NAMA is going to lose its shirt. That's a given, so we might as well get there as quick as possible.
 
Dub nerd;
I am only arguing about what might be better for Ireland. Fire or Repo sales seem to me a sure fire case of re-catching the Taxpayer again.
Given the potential pent-up Repo demand , if that happened to quote you {as quick as possible} I would fear a complete melt down and not just in money terms. I would fear that the Social Implications would tear Ireland apart.
Just to be clear , I also accept this issue needs sorting but I don,t think a bonfire is the answer , bonfires create only ashes !!

Maybe the answer is start with buy to lets and review ?
Regards, Salmon.
 
Salmon, don't the new codes allow for the mortgage holder to be able to sell the house themselves? So we don't have to be talking about fire or repo sales in the sense of the bank accepting a fraction of what the owner would have got for the same property.
 
I've been browsing estate agents and real estate websites in USA.
There are tons and tons of foreclosed houses for sale.
I believe this has always been the case there.
It is a necessary and normal function within a property market.

Is anybody making the case that foreclosed houses = destroyed economy?
 
salmon9077 said:
Dub nerd;
I am only arguing about what might be better for Ireland.
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I don't think so.
You are using emotive terms like "VULTURE FUNDS", as though we should be afraid.

We are talking about taking currently non-performing assets and flipping them so they become performing assets, generating economic activity.

Whether it's young couples or "VULTURE FUNDS", makes zero difference.
 
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