Media is on fire this week with this. Some people in neg equity salivating at prospect of getting their mortgage wrote down whereas other argue only those in serious arrears should be helped.
Costs range from €6bn to €40bn. Interesting to see some commentators such as Constantin Gurdgev and Morgan Kelly turn from doom mongers to advocates of this. Personal interest perhaps?
Surely a reformed bankruptcy procedure where it is cheap, quick and short (3 to 5 years) in terms of coming out of it would solve this. Debtor would lose the house but could get on with their lives. There is also a narrow focus on mortgage debt when a lot of people need help with other forms of debt such as credit cards.
Where does anyone stand on this?
Quote from: Orangemac on August 26, 2011, 07:58:18 AM
Media is on fire this week with this. Some people in neg equity salivating at prospect of getting their mortgage wrote down whereas other argue only those in serious arrears should be helped.
Costs range from €6bn to €40bn. Interesting to see some commentators such as Constantin Gurdgev and Morgan Kelly turn from doom mongers to advocates of this. Personal interest perhaps?
Surely a reformed bankruptcy procedure where it is cheap, quick and short (3 to 5 years) in terms of coming out of it would solve this. Debtor would lose the house but could get on with their lives. There is also a narrow focus on mortgage debt when a lot of people need help with other forms of debt such as credit cards.
Where does anyone stand on this?
Being totally self serving here in that I think it's the way to go on mortgage debt. Also u think all mortgages should be treated in the same way, otherwise, as always, those struggling to do the honest and correct thing and keeping their mortgages right at the cost of other areas if their life will be the ones to suffer.
In the larger context debt forgiveness on mortgages would free up money for spending by the likes of me, it would potentially grease the wheels on the housing Market, both things that would be very good for the economy in general. Of course it all depends on where the dough comes from?
the only fair solution is completely unworkable
giving a fixed sum to EVERY house owner in the state for them to use to pay off their mortgage or have as a wee bonus if they didnt have debt or didnt have a mortgage.
As we have effectively given this 'gift' aready to ALL the banks and mortgage lenders, i think that this is a fair and equal solution.
Otherwise I cannot see how the selection criteria will be valid or fair.
I know of people in all different aspects of trouble. some are not able to pay anything and are on a 'mortgage holiday' for 6 months, some are paying interest only for 12 months and as thus effefectively 'paying' their mortgage, some changed their mortgage to extend it over a longer period so they could afford to pay mortgage and eat - one suce family only had 8 or so years left to pay and its back up to 20 years now - in spite of none of these people hardly able to survive (some working , some not - some ex construction industry workers and those working are no in constructon).
so it will depend on what the package is, the above examples might not all fit into the category of eligibility for receiving financial aid - but they all need it.
these above are generally the folk that lost their jobs and cant get work or are getting wages way lower than before - wont get into the argument about those who over extended themseved through greed and whether they deserve being bailed out or not.
Negative equite another real issue - poor feckers cant sell their houses and need to.
Then there are th folk who dont owe and didnt get themselves into trouble etc - why dont they deserve to get an equal amount of money?
For me it everyone to get a few quid -thats the easiest and fairest way.
From a humanitarian point of view, anything that can relieve stress on mortgage holders that cannot make their payments would be a good thing of course, however...
a) What about those people who are making their payment, not in arrears, but are just about making ends meet? Should they be told 'hard luck' because they haven't actually gone into default.
b) What about people with 2 or more houses that are struggling? I can't countenance them being 'let off'. There was some woman on Eddie Hobbs nearly crying because she couldn't make the payments on her 5 houses. 5 houses? Sorry love, you gambled that some other poor sucker would pay an inflated price on 4 of them. If the houses were taken off them, and the debts written off, then maybe so, and leave them with their family home.
Quote from: AZOffaly on August 26, 2011, 10:16:08 AM
From a humanitarian point of view, anything that can relieve stress on mortgage holders that cannot make their payments would be a good thing of course, however...
a) What about those people who are making their payment, not in arrears, but are just about making ends meet? Should they be told 'hard luck' because they haven't actually gone into default.
b) What about people with 2 or more houses that are struggling? I can't countenance them being 'let off'. There was some woman on Eddie Hobbs nearly crying because she couldn't make the payments on her 5 houses. 5 houses? Sorry love, you gambled that some other poor sucker would pay an inflated price on 4 of them. If the houses were taken off them, and the debts written off, then maybe so, and leave them with their family home.
Couldn't agree more.
The place would just erupt if this was to happen. Pensioners/people in their 50s would go ape. For want of a better term the Lace Curtin Irish would just not let it happen.
I was wondering when this would come up on here.
First up, cards on the table time. I am currently renting, have been since I left school, and had several offers of mortgages from my bank for the last seven or eight years (until a 2007 anyway), and at no time was in a position to buy due to (1) I could never be sure that I was going to stay in the same location, and (2) Since I was first offered in 2004, the property market has been wildly overvalued, by any normal metric. It remains so in my own opinion, for what it's worth. The average house should cost three times the salary of the kind of person you'd expect to live there, plus one time the second salary. So if you look at the kind of house that would normally be owned by a two minimum wage workers, it should cost €80k or so. The kind of house owned by two teachers should cost €200k or so, and so on up the line. We're still a long way off that.
The key points to this debate from what I can tell, are these:
(1) "Too many people cannot pay their bills"
Agreed. It doesn't help any society for a large chunk to be unable to pay both their food bill and their electricity bill. A lot of people bought simply to have a home to raise a family, didn't "release equity" and continue to do their best by cutting every corner possible. If you asked me would I be willing to pay more tax to help these people out - absolutely. Personal viewpoint, but mine.
(2) "The banks got a bailout, so should we"
I equate this to a statement like "I know a guy who mugged someone on the street and didn't get caught, I should be allowed rob someone too".
The bank guarantee was the single most destructive, malevolent and treasonous act ever committed upon a country, and anyone who hand a hand, act or part in it deserves to be remembered in Irish history alongside Oliver Cromwell and the Black and Tan commanders. It does not serve as equivocation for any act, and the fact that people aren't hanging in front of a crowd baying for blood does not mean we should commit further such atrocities, albeit on a much lesser scale.
(3) "If people had more money to spend, the economy would kick start again"
Firstly, this is not a zero sum game - taking money from one set of taxpayers, or out of the capital budget, to bail out mortgage holders, does not increase the amount of money being spent in the economy - it just changes who gets to spend it. Secondly, this argument is not a good one in a economy where we are so open that most of what we spend goes abroad anyway. If I have no money and an old car, what little I can afford gets spent on Irish mechanics who keep it ticking over for me. If I have more money, I buy a new car, and the money goes abroad to the good people of Volkswagen/Citroen/Opel/Toyota etc. Increasing domestic spend in the Irish economy is nonsense as a policy, and is only adding up more debt for later with very small benefit on aggregate.
(4) "Nobody could have seen this coming"
It's funny how the people saying this, want to tax the savings/income of those of us who did see this coming and acted appropriately. Right now I have a decent deposit, reasonable income, and yet because I'm self employed and my fiance is on temporary contracts and can't get permanent because of the public service recruitment ban (even though she's absolutely vital to the whole department who could not function without her) then there is no chance we'd get a mortgage now, even if it would cost less than our rent. By taxing everyone to pay for this, you make home ownership even farther away for a large swathe of the community, ironically in many cases the people who didn't just dive in in the first place but instead thought about what they were doing - creating a two tier society, essentially.
The information was there for those who wanted to find it. I accept that many people aren't clued in on these things, but there were a lot of people who put less thought into buying a house than they would into buying a shirt. Such laziness has a cost, and here it is.
(5) "The Banks have already made provision for losses, it's in their books"
Sure - and if we were brilliant at forecasting, and knew exactly which loans were going to turn bad and which would be paid eventually, then that would be fine. But we don't - we don't even know that the provision that has been made is sufficient. If the banks have to take this hit, then they have to be recapitalised to take into account the loans that are not yet bad, but will turn so.
Above all, I have no faith in this country to execute anything properly. We got into this mess because we are a nation of people who like the short cut, who like to get the inside track and pull a stroke here and there, and this thing would be a cheat's charter. Already I know three people who are not paying their mortgage even though they can afford it in order to make sure that they are at the head of the queue for "forgiveness" when the time comes around. In fact why wouldn't you do that - it would be foolish to stretch yourself to pay a mortgage until this is resolved one way or another.
We have to get people out from under mountains of debt, and that will cost money - I'm okay with that - however I couldn't even begin to support this until the following rules are adhered to.
(1) Lose the debt, lose the house. There is no shortage of rental/empty accommodation out there and I hate the tone of debate in this country where not owning your own home is often portrayed as being "out on the street". You are not homeless, you just rent, like the rest of us have to do. Increase security of tenure for tenants alongside this too, to make renting more family friendly. But crucially, you cannot put in place a system that keeps family A in a big, six bedroom, five bathroom house that they can't afford, and do so by taxing people who made better decisions but as a result will never get the same standard of living.
(2) Make bankruptcy easier by all means, but make the punishment for trickery so much more severe. Severe penalties for any concealed assets, married couples can only go bankrupt together so no transferring of assets between them, and a charge on their estates to make sure that when the time comes, any assets they have upon death revert to the state to discharge a share of the bill, which accumulates at a moderate interest rate in the background.
(3) A public register. This might seem like naming and shaming, but if you're willing to take this option, this will be a barrier to people hiding assets since good old fashioned Irish begrudgery will ensure that people pulling stunts will get shopped.
(4) All assets are on the table for forgiveness. Debt can be forgiven, but not while pension schemes, assets or savings go untouched.
We need to have a restart, but a restart means just that - start again from scratch - not start again, while keeping some of the assets accumulated in the Celtic Tiger era, either savings or the house. Do that, and you'll get support.
The final aspect of this that I'd like to touch on is the fact that the spinners for this are taking advantage of the Irish dislike for Maths. The cost being discussed is €6bn - let's just break this down.
There are roughly 800,000 mortgages in Ireland, of which roughly 50,000 are in arrears and a further 40,000 have previously been restructured and are not in arrears at the moment, but obviously represent a much higher risk of falling into arrears in the future.
If we say the 6bn is for mortgages in arrears alone, then that's roughly €120,000 per mortgage, which would be enough to take the pressure off. However that does nothing for those who were restructured to interest only and are technically "performing" even though a return to capital plus interest would be crippling. It does nothing for people who are eating through savings keeping things going.
More importantly, and this is the bit that the average Paddy and Mary are missing, it allows nothing for the mortgage which is in huge negative equity, but is being met.
According to the Financial regulator, mortgage debt in Ireland is approximately €116bn. Half of this debt is new debt that was taken on since 2005. That means that based on the average level of negative equity right now, 58bn of this is backed with only 30-35bn of assets.
6bn is a blatant lie, a drop in the ocean, and we need to start debating it with correct figures, not nice palatable ones, basically a spoonful of sugar to make the medicine go down easier. We've had enough of that in this country.
Great post LS.
I have to say im in two minds about the notion of debt forgiveness. Currently i am living in London working to pay for my rent here as well as my mortgage at home. It would grind my f**king gears if people who cannot pay their mortgage gets some of their mortgage written off while i am working away from home to pay for my full mortgage.
Good man LS, nice well thought-out rant.
I'm in favour of debt forgiveness, being the following:
Give the bank the keys to your house, and they accept that in full settlement of your outstanding mortgage. The bank can't go after you for the negative equity, but they can go after you for any payments you missed prior to handing in the keys.
IMO that would be fair and just, and there'd be no question of a disadvantage to those who've been scrimping and saving to pay their way, versus those who've been living it up and mismanaging their debt.
Good man Lone Shark, and just to distil one of your well grounded observations: we're the most morally hazardous shower on the planet! ;)
Quote from: Billys Boots on August 26, 2011, 01:25:03 PM
Good man LS, nice well thought-out rant.
Is that not an oxymoron?
I agree with most of that LS, in fact nearly all of it, but I do think family homes are more than bricks and mortar, and that should be factored in to see if something can be done to help there. I don't think repossessions do much good for anybody really. Investment properties, by all means, but I think there should be some capacity for the family home to be kept in any debt forgiveness package.
Quote from: AZOffaly on August 26, 2011, 01:59:28 PM
I agree with most of that LS, in fact nearly all of it, but I do think family homes are more than bricks and mortar, and that should be factored in to see if something can be done to help there. I don't think repossessions do much good for anybody really. Investment properties, by all means, but I think there should be some capacity for the family home to be kept in any debt forgiveness package.
Up to a point. Every step should be taken to keep a family in their home, however not if it's a disproportionate home that's way beyond anything they could ever realistically afford, or if they refuse to give up savings and live reasonably frugally in an attempt to pay as much as possible.
What you could do is something like (for a mortgage of €400k, house valued at €250k):
Reduce the balance of the Mortgage to €200k, ownership reverts to 50/50 State/householder.
Householder services the €200k as a normal mortgage and looks to pay that off.
The state stake increases in line with either the official inflation rate, or a properly monitored and maintained house price index. (Not the kind of asking price based rubbish we have now)
Householder is obliged to pay all income subject to the top rate of tax off this balance, after tax is deducted. No obligation to pay anything else, but the balance is always subject to inflation, and the option is there to pay it down at any time if disposable income/a lump sum becomes available. The income compulsion means that people who improve their prospects in the long run then become liable, but everyone maintains a basic standard of living.
This balance then becomes a charge on the full estate of the individual/couple on death, or a charge on disposal.
Since house price inflation usually tracks long term inflation in the long run, it should balance out. Houses in more than 50% negative equity are fecked, but anyone in >50% negative equity simply couldn't afford that house in the first place so there's no saving that kind of situation. Bankruptcy is the only way out there.
Quote from: Hound on August 26, 2011, 01:35:07 PM
I'm in favour of debt forgiveness, being the following:
Give the bank the keys to your house, and they accept that in full settlement of your outstanding mortgage. The bank can't go after you for the negative equity, but they can go after you for any payments you missed prior to handing in the keys.
IMO that would be fair and just, and there'd be no question of a disadvantage to those who've been scrimping and saving to pay their way, versus those who've been living it up and mismanaging their debt.
My only issue with that is top up mortgages, or investment mortgages. If I have three properties and two of them are doing fine and one is in negative equity, I could selectively default on one, and yet retain wealth for myself while sticking the state with the bill. It would have to be PPR only, and those who took "equity release" are not eligible.
Otherwise it seems reasonable.
That sounds possible. And I should clarify, I'm not talking about where Joe Bloggs has decided his family home is going to be a 10 bedroom mansion in Dalkey or anything else completely out of all reason.
Quote from: Canalman on August 26, 2011, 11:51:01 AM
The place would just erupt if this was to happen. Pensioners/people in their 50s would go ape. For want of a better term the Lace Curtin Irish would just not let it happen.
I think it's a lot more than people in their 50s or pensioners who would go ape!
It makes me angry that people would even suggest it as an option! It's ridiculous.
Quote from: Fear ón Srath Bán on August 26, 2011, 01:48:01 PM
Good man Lone Shark, and just to distil one of your well grounded observations: we're the most morally hazardous shower on the planet! ;)
And the hold FF have/had on this Country proves it.
Quote from: Lone Shark on August 26, 2011, 01:07:12 PM
I was wondering when this would come up on here.
LS, there are a couple of things that I'd not agree with in your post - or maybe that its different perspective on what is still an unknown quantity of an actual 'issue'.
A.
[/quote]
"the property market has been wildly overvalued, by any normal metric"[/quote]
-in your opinion, but I wouldnt agree, the property market is now comparable and in line with the rest of europe at least, we were way lower than everyone else for years which is why we didnt HAVE to rent as much as other countries, because a lot more could actually afford it. Then our house prices went off the charts,
now we are back down and it seems like a balancing exercise - though a costly and disasterously upsetting one for a lot of people.
IMO we now are close to having correct valuations on properties. I wish they would go down , but I suspect that if they do, it now wont be by much more.
B.
[/quote]
"The banks got a bailout, so should we,
I equate this to a statement like "I know a guy who mugged someone on the street and didn't get caught, I should be allowed rob someone too".
The bank guarantee was the single most destructive, malevolent and treasonous act ever committed upon a country, and anyone who hand a hand, act or part in it deserves to be remembered in Irish history alongside Oliver Cromwell and the Black and Tan commanders. It does not serve as equivocation for any act, and the fact that people aren't hanging in front of a crowd baying for blood does not mean we should commit further such atrocities, albeit on a much lesser scale"[/quote]
I dont agree with your comparison for starters.I think a more accurate comparison should be along the lines of:
"I know a guy who mugged someone on the street and didn't get caught, the poeple that asked him to mug me came along and by way of compensation said they would pay some of what was taken back to me so I could at pay something towards my hospital bills etc though I'm still down a load of cash."
Yes the bank guarantee was a disaster for our economy. But we are speculating on whether there is debt forgiveness or not. If I'm honest, I dont want it
or dont need it. I'm alright jack. However there are plenty of people who I know that need or could need this in the near future.
IMO the 'debt forgiveness' should come from these banking institutions who received the bail out in the first place. I cannot see a problem with them being made to help their customers after they themselves were helped.
I'm not sure why your history over dramaticisation 'point' was made? Cromwell etc is bringing subjectivity and emotion into this equation where its not prudent or required. Again imo.
C.
[/quote]
"If people had more money to spend, the economy would kick start again"[/quote]
as I mentioned above, I dont believe this has to have any actual money passing hands. With less debt, then less people will default and the economy would continue on in its recovery (which I beleive it is on right now) - though defaulting mortgages would cause both panic and actual halting to the trade that is going on right now.
All in all , my 'alright jack' personal opinion has to see the bigger picture , so if debt forgiveness comes along, I wont oppose it- even though I 99% likely wont get a cent out of it. It will help me through the rest of the country remaining viable. My personal traditional Irish begrudgery will have to remain parked for the greater good of myself and the country.
All IMO - from my perspective of course.
I'd agree with a lot of the rest of your post though especially your view that the country and its decisions makers and the people charged to carry out any decisions - cannot be trusted.
We still are lacking proper policy, procedure and legislation in most areas. There are still loop holes and cronyism at the highest levels.
One final thing - not a criticism, surely yer missus can go get another job in the private sector if she is that worried about these fecking contracts.
I know a bit about this - I did so myself - though there is no such thing as a perm job these days, still a perm job is a little better than always watching for a contract knowing it has an end date and not knowing if its going to be renewed. She should ask for redundnacy, threaten to leave unless made perm (Gov agencies can now do this) or find a new job.
...and another thing...lol!
There are a lot of people out there with interest only mortgages which have been held since before 2007. A lot of those people are now in negative equity or just simply connot re-mortgage to go to repayment mortgage (basically these are all that's available unless you have positive equity or a deposit) because it would cripple them.
these mortgages are costing the banks money even though they are being paid due to the interest rates being so low.
In this scenario it may be mutually beneficial to both the bank and the customer for a reduction in the capital of the loan permitting the home owner to re-mortgage to an affordable repayment mortgage. At least this way there is cash flow coming into the bank after the initial hit and the home owner is more likely to be able to continue to meet their payments. I know quite a few people in this situation. Basically they were given a blank cheque by the mortgage company for as much as they wanted on interest only deals. A lot of people took this on with a view to keeping their home a couple of years, making a few quid on it, selling then building/buying something using the profit as a deposit meaning they could afford a similar type house on repayment basis. Yes it was a risk, but everyone was at it and the banks permitted it to happen. So IMO, the banks should shoulder part of the blame.
Quote from: tbrick18 on August 28, 2011, 12:15:09 PM
...and another thing...lol!
There are a lot of people out there with interest only mortgages which have been held since before 2007. A lot of those people are now in negative equity or just simply connot re-mortgage to go to repayment mortgage (basically these are all that's available unless you have positive equity or a deposit) because it would cripple them.
these mortgages are costing the banks money even though they are being paid due to the interest rates being so low.
In this scenario it may be mutually beneficial to both the bank and the customer for a reduction in the capital of the loan permitting the home owner to re-mortgage to an affordable repayment mortgage. At least this way there is cash flow coming into the bank after the initial hit and the home owner is more likely to be able to continue to meet their payments. I know quite a few people in this situation. Basically they were given a blank cheque by the mortgage company for as much as they wanted on interest only deals. A lot of people took this on with a view to keeping their home a couple of years, making a few quid on it, selling then building/buying something using the profit as a deposit meaning they could afford a similar type house on repayment basis. Yes it was a risk, but everyone was at it and the banks permitted it to happen. So IMO, the banks should shoulder part of the blame.
When are people (greedy people) going to wake up and take responsibility for their own actions?
(1) I think everyone agrees that the property market was wildly overvalued - I accept that there are different views regarding the current situation, however my own view that the "3 X the salary of the person(s) living in the house" is historically sound.
(2) The mugging analogy. Just to be clear, we were all mugged to pay for the banks. Now the solution seems to be splitting up those who were mugged into the prudent savers who didn't buy, those who bought within their means and sensibly, those who bought within their means and lost both family incomes, and those who bought with no safety net, i.e. beyond their means.
Debt forgiveness would be mugging the first two groups a second time in order to bail out the second two, and giving schysters every chance to cream a bit off the top in the process.
(3) "The Banks" no longer exist. Natural justice would of course dictate that the entities that created so much of this problem would play a huge part in the solution, but those entities no longer exist, the taxpayer has now stepped in to do so instead. They did not receive a bailout in as much as those they owed money to did - that money is now gone, passing it down along the line to Irish citizens is not an option any more.
(4) The Cromwell thing may seem emotive, but I despise this argument of "The banks were bailed out, why can't "we" be too?". People need to realise how heinous the bailout was, and if it takes grandiose analogies to do that, so be it.
(5) Money has to change hands for the bailout. If the banks wipe mortgage debt off their books, that has to be paid back in to ensure they are solvent. That money has to come from somewhere, either increased borrowing or taxation, or reduced spending. "No actual money changing hands" is just not possible.
(6) The good lady could theoretically go private sector, but she's in research where private sector opportunities are limited. Secondly, I'm self employed, so if we're to have any mortgage prospects at all, banks will look a lot kinder on us if there is a public sector wage there.
The traditional forms of debt forgiveness are bankruptcy and inflation.
The souths bankrutcy rules have been OTT but move to the North and within two years you can start with a clean slate again. That is fair.
The second solution might come in time via a default.
Quote from: Lone Shark on August 28, 2011, 03:29:34 PM
(1) I think everyone agrees that the property market was wildly overvalued - I accept that there are different views regarding the current situation, however my own view that the "3 X the salary of the person(s) living in the house" is historically sound.
(2) The mugging analogy. Just to be clear, we were all mugged to pay for the banks. Now the solution seems to be splitting up those who were mugged into the prudent savers who didn't buy, those who bought within their means and sensibly, those who bought within their means and lost both family incomes, and those who bought with no safety net, i.e. beyond their means.
Debt forgiveness would be mugging the first two groups a second time in order to bail out the second two, and giving schysters every chance to cream a bit off the top in the process.
(3) "The Banks" no longer exist. Natural justice would of course dictate that the entities that created so much of this problem would play a huge part in the solution, but those entities no longer exist, the taxpayer has now stepped in to do so instead. They did not receive a bailout in as much as those they owed money to did - that money is now gone, passing it down along the line to Irish citizens is not an option any more.
(4) The Cromwell thing may seem emotive, but I despise this argument of "The banks were bailed out, why can't "we" be too?". People need to realise how heinous the bailout was, and if it takes grandiose analogies to do that, so be it.
(5) Money has to change hands for the bailout. If the banks wipe mortgage debt off their books, that has to be paid back in to ensure they are solvent. That money has to come from somewhere, either increased borrowing or taxation, or reduced spending. "No actual money changing hands" is just not possible.
(6) The good lady could theoretically go private sector, but she's in research where private sector opportunities are limited. Secondly, I'm self employed, so if we're to have any mortgage prospects at all, banks will look a lot kinder on us if there is a public sector wage there.
Some great points being made on this thread. Quick one for the OP, Morgan Kelly recently advocated handing back the IMF loan and cutting the PS by 40% overnight, including his own pay. He was hardly arguing for his own benefit then.
I'd just like to add one thing to the above. The arguments above against Debt Forgiveness (it will never be forgiveness, more likely debt for equity) are all sound and well thought out. But they miss one crucial thing.
Democracy is not what most of us think it is. We discovered that when the Bank Bailout was imposed on us and when our verdict on Lisbon wasn't the correct one. If the politicians stupidly decide to follow the Bank Guarantee fiasco with a Debt Forgiveness farce then they can do it.
Democracy is merely a weapon of choice of those in power.
I am hopeful (maybe naively) that FG will resist the attraction of populism over prudence, but I would worry about Labour.
Quote from: Lone Shark on August 28, 2011, 03:29:34 PM
(1) I think everyone agrees that the property market was wildly overvalued - I accept that there are different views regarding the current situation, however my own view that the "3 X the salary of the person(s) living in the house" is historically sound.
(2) The mugging analogy. Just to be clear, we were all mugged to pay for the banks. Now the solution seems to be splitting up those who were mugged into the prudent savers who didn't buy, those who bought within their means and sensibly, those who bought within their means and lost both family incomes, and those who bought with no safety net, i.e. beyond their means.
Debt forgiveness would be mugging the first two groups a second time in order to bail out the second two, and giving schysters every chance to cream a bit off the top in the process.
(3) "The Banks" no longer exist. Natural justice would of course dictate that the entities that created so much of this problem would play a huge part in the solution, but those entities no longer exist, the taxpayer has now stepped in to do so instead. They did not receive a bailout in as much as those they owed money to did - that money is now gone, passing it down along the line to Irish citizens is not an option any more.
(4) The Cromwell thing may seem emotive, but I despise this argument of "The banks were bailed out, why can't "we" be too?". People need to realise how heinous the bailout was, and if it takes grandiose analogies to do that, so be it.
(5) Money has to change hands for the bailout. If the banks wipe mortgage debt off their books, that has to be paid back in to ensure they are solvent. That money has to come from somewhere, either increased borrowing or taxation, or reduced spending. "No actual money changing hands" is just not possible.
(6) The good lady could theoretically go private sector, but she's in research where private sector opportunities are limited. Secondly, I'm self employed, so if we're to have any mortgage prospects at all, banks will look a lot kinder on us if there is a public sector wage there.
1.I know we all 'WANT' the house prces to be lesser, but there are a lot of properties now at the levels you mention. We are in line with other countries. The united states of Europe seems to be working...
2. I don't disagree. That's why personally I would prefer if we all got something, or we all got nothing. Like you I wouldn't trust bodies in this country to exact and execute a system where the chancers and undeserving are spotted and don't get included. The ordinary deserving person usually always gets left out.
4. I think people realise at this point how our Country is being hamstrung because of the bank debt we were made take on by our ersehole government – out of self interest and cronyism from these people and their pals at the top table.
5.I still don't agree. If a €150k mortgage is written down to a €100k mortgage, and the monthly repayments reduce accordingly –this will suffice for a lot of people and no actual money changes hands. There may be other options. This is just a potential suggestion.
6.Been in your shoes regarding looking for mortgages etc (though I thought you wanted to remain renting !!) but banks etc no longer really give a stuff whether you work in civil service or not – only if you are a garda it seems. Getting out of that renewing contrack lark give great piece of mind – esp to women !! She has a choice.Many dont.
Quote from: lynchbhoy on August 29, 2011, 09:37:00 AM
1.I know we all 'WANT' the house prces to be lesser, but there are a lot of properties now at the levels you mention. We are in line with other countries. The united states of Europe seems to be working...
I don't know. I accept there are houses, and I wouldn't consider myself excessively greedy when it comes to what I'd want in a long term family home, but I just don't see places that you'd be happy to raise a family in for under €200k, which is what it would have to be in order to be in equilibrium for people on average wages. I'm not asking for a six bedroom pad in the heart of a posh suburb, but even rural villages homes are still either badly constructed or else overpriced.
Quote from: lynchbhoy on August 29, 2011, 09:37:00 AM
4. I think people realise at this point how our Country is being hamstrung because of the bank debt we were made take on by our ersehole government – out of self interest and cronyism from these people and their pals at the top table.
I agree the acceptance is there, but a lot of people are reacting the wrong way - instead of saying that a wrong was done, and we should be mobilising to undo it, it's saying that a wrong was done, so now I want my share.
Quote from: lynchbhoy on August 29, 2011, 09:37:00 AM
5.I still don't agree. If a €150k mortgage is written down to a €100k mortgage, and the monthly repayments reduce accordingly –this will suffice for a lot of people and no actual money changes hands. There may be other options. This is just a potential suggestion.
The banks' long term assets are reduced, and thus this reduces their capital, which in turn requires more recapitalisation in order for them to turn solvent. In many cases those €150k mortgages will not return the full sum extended, and that's what provision has been made for, but any system that attempts to guess which €150k mortgages will get paid and which won't will invariably get a lot wrong. The old system of proving your ability to save and borrowing within your means made sense. Now I'm not advocating that those who cannot pay be reduced to penury for life at all - by all means work out a plan with someone who has a reasonable long term possibility to pay off the debt, even if that means only paying 2/3 of the interest requirement right now - however keeping people in houses that they could not afford unless their salary doubled or more makes no sense. It does nobody any favours and everyone would be better off with a reset. Lose all debt, lose all assets, and start again, without this 12 year bankruptcy nonsense. That is proper debt forgiveness, and makes sense. If we just write down mortgages where foreclosure is not inevitable, then there is no way around it - the banks will need more capital again to compensate.
Quote from: lynchbhoy on August 29, 2011, 09:37:00 AM
6.Been in your shoes regarding looking for mortgages etc (though I thought you wanted to remain renting !!) but banks etc no longer really give a stuff whether you work in civil service or not – only if you are a garda it seems. Getting out of that renewing contrack lark give great piece of mind – esp to women !! She has a choice.Many dont.
I've no wish to remain renting, largely due to the fact that I'm getting married next year and would like to put down roots of some sort. I'd be happy to rent if there was adequate legislative security out there, but there isn't, and anyway, the females of the species don't consider anything to be "home" unless they can decorate it themselves. I'm sure you know the score.