Why do people expect to be let off Negative Equity? You made a promise, stick to it!

Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

micamaca said:
But isn't this why mortgage holders are so annoyed? Developers took out huge sums too, took too high a risk. Banks took too high a risk by lending so much to developers.

But it seems like the small fish who also took out too high loans are going to have to continue repaying their mortgages on properties with negative equity. On top of that every cent of taxpayers money is going into NAMA to bail out banks and developers. We can see the effects of NAMA already...no money for natural disasters, hospitals etc. Everywhere I look I see cut-backs, reductions in services and the semi-state sectors are increasing prices. Am I wrong?

You can hardly blame a normal human reaction asking why should we pay, when others, who borrowed more, are not paying.
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Banks are being bailed out to ensure that all our wages or dole payments have some way of being distributed to us. To make sure that cash stays in the ATM, to make sure that your insurance payment goes through. Banks are very important to the economy and need to be maintained. That being said they should never have been allowed to get into this situation and the regulator has a lot to answer for. Also, bank directors or top management have no right to have their job saved unless there is literally no-one else who can do it.

People at the top need to suffer for what they have done to this country. TDs, ministers, media lapdogs, bankers, property developers, etc. those who were wreakless and irresponsible need to feel the majority of this pain. These people should not be allowed to hold onto the money they personally hoarded during the boom, this includes inflated pensions etc, they should pay it all back and start from zero again. They risked it and lost it, they should not have a net benefit from their irresponsibility. Otherwise we will just have the same problem in the next book where the cheer leaders know they will get to keep whatever they manage to get for themselves when the bust comes.

Anyone who took a gamble should have to stand by their debt and pay it all back. Nobody should be let off because "t didn't work out". Paddy Power wouldn't give your money back if the horse you backed didn't come in.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

No developers are being bailed out. they still owe every cent they borrowed.

The banks are being funded so our economy can continue to function.
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Owing money and actually paying it back are two quite different things. I'd also disagree that the Irish economy is 'functioning'. It's collapsing.

in response to this:
Have you even the slightest basis for making such a comment?

Have you read their consultation paper or even part of it?

Did you attend their seminar on the topic?
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No is the answer.
I'm basing my opinion on past events. We weren't consulted over NAMA or the bank guarantee. I'm very cynical when it comes to such organisations, and what their priorities are. I could be wrong of course...
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

canicemcavoy said:
Including Anglo, you mean? Tell me how Anglo keeps our economy functioning - unless you count giving loans like jellybeans to developers and politicans.

NAMA's purpose is not to get banks lending - indeed, the ex-chairman of AIB has already said it will not have this effect. It's there to, quote, "put a floor on the property market".
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Anglo should never have been saved. It wasn't of structural important to the main economy. It was saved for political reasons more than economic ones.

AIB, BOI, etc were the ones that needed saving as they have the majority of current and business accounts.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

whizzbang said:
Anglo should never have been saved. It wasn't of structural important to the main economy. It was saved for political reasons more than economic ones.

AIB, BOI, etc were the ones that needed saving as they have the majority of current and business accounts.
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I would agree with that. But is there ever going to be a change of political willpower in this country? We saw the anger at the BOI shareholders meeting...not enough change of management at the top and on the board. The new financial regulator is calling for an inquiry and been ignored by the government, who should be pulling their head out of the sand, admitting they did very badly and make a fresh new start.

I agree that developers should be made to feel more pain. Are any of them feeling the pain as badly as ordinary people who are struggling to make ends meet every month? I sincerely doubt it. I'm sure they are feeling some pain, but it hardly compares to what ordinary joes are going through. So again, I don't blame people for wondering why are they the ones who have to pay and pay again. Tis very bleak.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

micamaca said:
I would agree with that. But is there ever going to be a change of political willpower in this country? We saw the anger at the BOI shareholders meeting...not enough change of management at the top and on the board. The new financial regulator is calling for an inquiry and been ignored by the government, who should be pulling their head out of the sand, admitting they did very badly and make a fresh new start.

I agree that developers should be made to feel more pain. Are any of them feeling the pain as badly as ordinary people who are struggling to make ends meet every month? I sincerely doubt it. I'm sure they are feeling some pain, but it hardly compares to what ordinary joes are going through. So again, I don't blame people for wondering why are they the ones who have to pay and pay again. Tis very bleak.
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Absolutely, I wonder if this downturn will lead to a serious review of people's voting habits. Or will they still think "A sure I always vote for X"

I do think they public are getting angrier though, so that may lead to some change up top.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

It is easy to rant away about negative equity, politicians and banks, but perhaps people should look at the issues here. Widespread negative equity is a massive drag on an economy, and so it needs to be addressed somehow. If negative equity stops people from trading up from one-bed apartments and prevents them from starting families, then it also has negative social consequences over time.

People who default because of an inability to pay their mortgage will need to be housed somewhere, so the state will effectively pick up the tab for housing them anyway.

For others who want to trade up, are able to meet higher repayments, but who can't sell because of serious negative equity, perhaps the government should lean on the banking sector to come up with innovative solutions to allow them carry the negative equity from one property over to another?
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Absolutely, I wonder if this downturn will lead to a serious review of people's voting habits.
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I think I'll vote for the slightly greyer party instead of the grey party this time.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Will our government take the move Obama is making and bring in a tax on banks to get the taxpayers money back? I just saw it reported on the news last night. My first reaction was fair play to you. At least it would deter banks from taking such reckless action again.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

For others who want to trade up, are able to meet higher repayments, but who can't sell because of serious negative equity, perhaps the government should lean on the banking sector to come up with innovative solutions to allow them carry the negative equity from one property over to another?
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An interesting idea. Does it mean that banks will have to lend at >100% of the value of the property? effectively unsecured loans?

I pay €100k for a house. I can only sell for €50k. I want to trade up to a house worth €175k.
Will I get a €225k mortgage on a €175k house? (where €50k is unsecured?)
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

RIAD_BSC said:
It is easy to rant away about negative equity, politicians and banks, but perhaps people should look at the issues here.
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It's funny how bulls always try to dismiss their opponent's arguments as "ranting". I'm not ranting here at all. I'm calming stating the fact that the country has no money to be indulging those who, having bought overpriced property, now decided they need me (remember, _someone_ always pays) to fund their wish to move into even bigger property.

That, in a nutshell, is the issue here.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Have no doubt everyone will be made pay. you only get a deal if you have leverage of soms kind and most regular folks are sitting ducks.

I bought a house in Brighton in 1998 and the guy I bought it from had been paying the mortgage for 10 years and was only just out of negative equity - hence the bank "allowed" him to sell it to me. I then sold it just two years later and it had increased in value by 50%.

If you buy a home then make sure you can pay the mortgage and forget the valuation. In 20 years or so you will own it and its likely to be worth at least as much as you paid for it! Whereas if you want to "invest" in property then realise you have become an investor with all the risks that go with that.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Should it not be split into two scenarios:

People who are in negative equity who purchased a 'Home'
People who are in negative equity who purchased an 'Investment property'

As said above, and quite rightly, if you purchased a property as an investment thats the risk you took...

If you purchased a property as a home, as my sister did (purchase price €650,000 - current selling price €400,000) it shouldnt matter. As my sister said to me, I signed for the mortgage, i could afford the repayments, this is my home so it makes no difference to me if the value decreases or even if it increases, I am paying back what i agreed to borrow.

Now, before any jumps down my neck, I do understand not every scenario is straight forward, poeple have lost jobs, cannot afford repayments, may need to downsize, but, and maybe i am wrong, I think a lot of poeple just regret their decision to sign up to a 35 year expensive mortgage and are looking for a way out.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

RIAD_BSC said:
It is easy to rant away about negative equity, politicians and banks, but perhaps people should look at the issues here. Widespread negative equity is a massive drag on an economy, and so it needs to be addressed somehow. If negative equity stops people from trading up from one-bed apartments and prevents them from starting families, then it also has negative social consequences over time.

People who default because of an inability to pay their mortgage will need to be housed somewhere, so the state will effectively pick up the tab for housing them anyway.

For others who want to trade up, are able to meet higher repayments, but who can't sell because of serious negative equity, perhaps the government should lean on the banking sector to come up with innovative solutions to allow them carry the negative equity from one property over to another?
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People have options. They can rent a bigger place while renting out their current owned property. You do not have to own a property to raise a family in it.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

MANTO said:
Should it not be split into two scenarios:

People who are in negative equity who purchased a 'Home'
People who are in negative equity who purchased an 'Investment property'
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Very good point. People do tend to think of the negative equity on a particular property. But if debt settlement is an option for them, then their entire assets and liabilities should be put on the table. For example

Home value: €600k
Investment property value: €300k
Home mortgage: €300k
Invesment mortgage €400k.

I am not in negative equity overall, so there should be no question of a debt settlement.

When I say their "entire assets", I mean their entire assets, including their pension fund. Debt settlement should not be easy and pain-free. But at the same time, people who have no hope of repaying their debts, should be able to earn a fresh start.

If you can afford to make your repayments, negative equity is not too relevant and it should not be written off. But then why write off the negative equity of those who can't make their repayments. It's a very complicated and difficult issue with a lot of implications for society and the economy.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

I rented for 10 years in Dublin, all the while trying to save a little bit here and there to buy my own property which I did almost 4 years ago at the age of 33. Myself and my husband bought a two bedroomed apartment hoping to sell it on after a couple of years and upgrade to a house.

Of course now in all likelyhood we will never sell the apartment without still owing a lot of money to the bank so we will "suck it up", stay here and pay what we owe. Since buying the apartment we have had a little girl and now we are expecting our second child in June. Our living arrangements are by no means ideal but we just have to get on with it.

We had condsidered renting out our apartment and renting a house with some more room and a garden but that would involve losing the mortgage interest relief on the apartment. Also if tenants moved out and the apartment was left idle for any length of time we wouldn't be able to afford to pay the mortgage and rent.

I have never expected anyone to pick up the tab for my mortgage, I needed a home and wanted to start a family. I had already been renting for 10 years and didn't want to rent for the rest of my life. I don't regard myself as greedy for wanting this.

Canicemcavoy: I don't expext you or anyone else to fund my wish to move to a bigger property.

There's a lot of generalisation on this thread and a lot of nastiness being directed towards people who bought overpriced houses in the last 10 years or so. Not everyone is looking for a scapegoat and those that are looking for a helping hand are people that couldn't foresee (understandably) both earners in their household losing their jobs and being unable to pay their mortgage.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

hokey32 said:
I rented for 10 years in Dublin, all the while trying to save a little bit here and there to buy my own property which I did almost 4 years ago at the age of 33. Myself and my husband bought a two bedroomed apartment hoping to sell it on after a couple of years and upgrade to a house.

Of course now in all likelyhood we will never sell the apartment without still owing a lot of money to the bank so we will "suck it up", stay here and pay what we owe. Since buying the apartment we have had a little girl and now we are expecting our second child in June. Our living arrangements are by no means ideal but we just have to get on with it.

We had condsidered renting out our apartment and renting a house with some more room and a garden but that would involve losing the mortgage interest relief on the apartment. Also if tenants moved out and the apartment was left idle for any length of time we wouldn't be able to afford to pay the mortgage and rent.

I have never expected anyone to pick up the tab for my mortgage, I needed a home and wanted to start a family. I had already been renting for 10 years and didn't want to rent for the rest of my life. I don't regard myself as greedy for wanting this.

Canicemcavoy: I don't expext you or anyone else to fund my wish to move to a bigger property.

There's a lot of generalisation on this thread and a lot of nastiness being directed towards people who bought overpriced houses in the last 10 years or so. Not everyone is looking for a scapegoat and those that are looking for a helping hand are people that couldn't foresee (understandably) both earners in their household losing their jobs and being unable to pay their mortgage.
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Fair play to you for getting on with it hotkey! This is exactly what people should be doing. Making the best of a bad situation and investigating their options. There is nothing wrong with people who bought houses at any time, that is their right and they are of course free to do it. I think people are taking issue with people demanding to be bailed out of a situation they go themselves into rather than dealing with it responsibly like yourselves.

I have nothing but respect for people who are paying their way and making do with what they have rather than demanding they be bailed out by someone else. Its people like you standing by their responsibilities that will bring this country back around, not those that want a free "get out of jail" card.

Best of luck to you and the family!
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

hokey32 said:
Canicemcavoy: I don't expext you or anyone else to fund my wish to move to a bigger property.
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That's good and my sentiments aren't directed at people like you, or everyone in negative equity. Best of luck to you.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

If there had been no down turn in property prices,no NE,had prices continued to rise at 15% a year,how many here bleating about debt forgiveness would be ringing up their lender to offer them a cut of the "profits"? or sending on a cheque to the Revenue for distribution to the tax payers?

I have a five year old car,its worth way less than the loan I originally took out and if I were to sell it tomorrow I would be in NE,why on Earth should I expect debt forgiveness for this loan?


You took the money,repay it,stop looking for the taxpayer to dig you out because believe me kids there will be no money or tolerance forthcoming from the majority of grown ups for this sort of nonsense.
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

If a business finds itself unable to meet its debts (banks, builders, developers etc), they would be considered insolvent. They would be liquated and their assets divvied up to pay off the debts. The owner's would then be free to get on with their lives, unencumbered with the hangover of debt (assuming no reckless trading).

If a public Joe finds themselves unemployed or their salary cut in half and unable to meet their debts, what can they do. Very little it seems. That debt follows them to the grave and beyond, blighting their lives.

Where is the fairness in this, or am I being naive in believing that what’s good for the goose should be good for the gander???
 
Re: Why do people expect to be let off Negative Equity? You made a promise, stick to

Under the Bankruptcy Act, a person can file for bankruptcy but the law is so expensive and difficult that, in practice, very few people do. I think only 8 did last year. An insolvency specialist told me that he would not recommend the process for anyone with less than €1m in assets.

The objective of the LRC is to propose new laws in this area. Most, if not all, of the European countries have more modern systems. The Debt Settlement would be non-judicial which means that it would be done in private. The creditors would be consulted but the Debt Settlement Office can probably impose a settlement. The person would have around 5 years to pay off whatever debts they could and then any remaining debts would be written off.

It is not proposed that this would apply to negative equity though. They are thinking more of people's unsecured debts. But they might propose to sell the house and write off the negative equity.

Make a submission to the LRC and express your views on it.
 
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