Debt Forgiveness

[pintsofguinness]

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. 

[LeoMc]

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.

[lynchbhoy]

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.

[tbrick18]

...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.

[pintsofguinness]

...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?

[Lone Shark]

(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.

[bcarrier]

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.

[muppet]

(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.

[lynchbhoy]

(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.

[Lone Shark]

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.

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.

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.

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.