# 2 year stay for Spanish mortgage arrears



## itsallwrong (15 Nov 2012)

SPAIN passed a decree on Thursday to help the most needy families facing eviction during the nation's economic crisis, responding to an outcry over a homeowner who killed herself when bailiffs arrived to throw her out.

http://www.independent.ie/business/...for-two-years-following-suicides-3295049.html

After 400,000 homes/unit were repossessed by the banks, they only move and take action when people start killing themselves in despair.

Wonder how many it will take in this country before they do something?


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## Thereddevil (20 Nov 2012)

I know people say debt forgiveness wont work but what else can happen ? People talk about reckless borrowing but who honestly saw wages dropping so far and all these never ending taxes ? I borrowed 4 times our salaries and am slowly being dragged into it , was that reckless ? The government cant keep implementing austerity and expect people to keep up their repayments .Honest people are being screwed and I hope this government does something because plenty of people in Ireland have done what those 2 Spanish people have done because of constant pestering from Irish banks who caused the mess in the first place !


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## lovelyhorse (21 Nov 2012)

4 times combined salary? 

Traditionally was it not usually 2.5 times primary earner and 1.5 times secondary earner? 

Granted that many household incomes have taken a significant cut but lending and borrowing were too loose, all predicated on salaries and property prices increasing. Our incomes had risen above the European average and we never had much hope of sustaining that. 

It is tragic that these people felt they had no other choice but to take their own lives. However, who pays the debts of all the people who borrowed too much?  

I just don''t understand it, I have an awful aversion to debt personally. I rent and save. My household has enough in savings to keep us going for 2.5 years if we lost BOTH incomes tomorrow, probably would actually make 3 years out of that as we would have no work associated costs such as travel. Or we can use those savings to buy a modest home with cash, which we will do only when we have a nest egg built up for a further six month emergency fund.  

I have empathy for anyone in a dire situation facing repossession etc but many, many people do not own a home around the world, there is life after repossession or bankruptcy and I hope that people can see that. Some people can work their way out of debt by sacrificing all non-necessities until the debt is clear. Others who are unfortunate enough to have lost their jobs may have unsustainable debt, and may need the state to shelter and feed them until they get back on their feet. 

It is unfair to ask those who have chosen a frugal path and have not taken on debt to pay the debts of those who did and let them retain those assets.


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## Thereddevil (30 Nov 2012)

I agree everyone cant expect to be bailed out but honest decent people are being taxed to the point of breaking and simply cannot sustain all the taxes and their commitments . This has to be tackled to have an economy that can recover . Yes the budget deficit has to be tackled but people have to be able to put food on their tables also . The government said in the programme for government that they would tackle mortgage arrears and give people sustainable solutions but what have they done ? Interest only and payment holidays are temporary 6 month solutions at best . Repossessing houses is pointless as they are worthless . So yes you were sensible by not buying but some people had a choice at the time rent for 1200 per month or buy for 1400 so they cant be blamed entirely either .


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## shigllgetcha (30 Nov 2012)

lovelyhorse said:


> 4 times combined salary?


 
4 times combined salary is normal


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## lovelyhorse (30 Nov 2012)

shigllgetcha said:


> 4 times combined salary is normal



It shouln't be. Lending too loose in recent times, that is what got people into the messes they are in now.


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## Thereddevil (2 Dec 2012)

And given that lending is a 2 way street why should the borrower be the only one to suffer because of reckless lending ?


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## shigllgetcha (3 Dec 2012)

lovelyhorse said:


> It shouln't be. Lending too loose in recent times, that is what got people into the messes they are in now.


 
Its what got some people in the mess they are in, not everyone. There is no rate of lending that will protect someone if they get unemployed no matter how carefull the banks and borrowers are with debt to income ratios. Thats the risk both sides took and the main problem at the moment are the sheer numbers that are in trouble, most of which will improve as the economy recovers (out of work, drop in hours/income etc)

The reason banks are trying to help customers in trouble is that it isnt worth their while repossesing houses in NE and adding houses to the market would only make the problem worse. If the market was better and there wasnt so much NE it would be a different story


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## lovelyhorse (3 Dec 2012)

shigllgetcha said:


> Its what got some people in the mess they are in, not everyone. There is no rate of lending that will protect someone if they get unemployed no matter how carefull the banks and borrowers are with debt to income ratios. Thats the risk both sides took and the main problem at the moment are the sheer numbers that are in trouble, most of which will improve as the economy recovers (out of work, drop in hours/income etc)
> 
> The reason banks are trying to help customers in trouble is that it isnt worth their while repossesing houses in NE and adding houses to the market would only make the problem worse. If the market was better and there wasnt so much NE it would be a different story



The market is not sick, so there is little point wishing it will get "better" - the market is returning to normal pricing. 

Yes, that is the risk both sides took, not the risk taxpayers like myself took. So, forgive me if I resent the fact that my hard earned tax euros have been fed into banks so other people can live in gaffs they cannot afford.


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## Thereddevil (3 Dec 2012)

So what is your solution ? Repossess houses that cant be sold on and put these people into council houses ? Wheres your precious tax dollars going to go then ?


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## Wishes (4 Dec 2012)

Lovelyhorse, its not that simple.  Our tax has already been fed into the banks.  The distressed mortgages are not benefiting from the tax that was pumped into these bankrupt banks.  

In the few cases of repossession we have seen, most people are still reliable for the debt long after the house has been foreclosed.  The banks are still keeping your tax bailout, they are not returning it to you, me or anyone else.  They are being paid for the distressed property twice over.

There is a five year waiting list for a council house.  Where do you propose to house the repossessed?

If we issue them with rent allowance, we are looking at bailout number two.


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## Thereddevil (4 Dec 2012)

I couldnt agree more Wishes , well said !


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## shigllgetcha (5 Dec 2012)

lovelyhorse said:


> Yes, that is the risk both sides took, not the risk taxpayers like myself took. So, forgive me if I resent the fact that my hard earned tax euros have been fed into banks so other people can live in gaffs they cannot afford.


 
Im not defending the bailout here but you took that risk with all your savings that you mention in your first post, would you have rather you lost that rather than your tax dollars?



lovelyhorse said:


> The market is not sick, so there is little point wishing it will get "better" - the market is returning to normal pricing.


 
I never said I wished the market would get better or that that would solve anyone's problems, I was reffering to the fact that demand is so low and supply is so high at the moment that it puts banksoff wholesale repossessions as theyll never get the houses sold if they take them back, and the fact that so many people are in NE that repossesing means the bank cant get back what they lent out so its better for them to keep people in their houses paying atleast some of their mortgage with a hope that they will eventually pay it all off. I didnt say things would be better if the market returned to boom time prices


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## lovelyhorse (5 Dec 2012)

Never said my savings were in a bank so I did not take that risk ;-)

The banks have been provisioned with funds, as has been mentioned here, by the sovereign to write down mortgage debt. That should be done, but the asset must be returned to the bank. If there is no security for mortgage lenders, i.e. it is difficult to repossess then interest rates will naturally go sky high as the risk is much higher for the lender. Do you want to see interest rates circa 15% + like in the past? 

Also, supply of family homes is actually down quite a bit. From my fragile memory down from roughly 85 thousand properties 12-18 months ago for sale to around 74 thousand on daft. (People will need to look this up for exact figures). Supply is constrained, particularly in Dublin, which is why we have seen a slight increase in sales prices there recently (along with scramble to get MIR before it ends). Supply is constrained because of people getting to stay where they are not paying their mortgage. 

The market needs to reset, its a pity for those who are left with an overpriced chair when the music stops but kicking the can down the road is not going to help things. If you want debt forgiveness on a wide scale where those in arrears get to stay in their house, how do you decide who gets what? Do we write off 200k on a mac mansion of 3000 sq foot or 70k on a 2 bed apartment that cost 440k initially? Why does an individual get to live in a lovely house they cant afford when others who were being sensible have to pay for it? Sure, if thats the case I'm off out to borrow 4 x my annual income with the minimum deposit I can get away with. Sure I'll spend all my disposable income and then just not bother paying the mortgage, the nice lads will write it off and I'm sitting pretty.


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## lovelyhorse (5 Dec 2012)

Wishes said:


> Lovelyhorse, its not that simple.  Our tax has already been fed into the banks.  The distressed mortgages are not benefiting from the tax that was pumped into these bankrupt banks.
> 
> In the few cases of repossession we have seen, most people are still reliable for the debt long after the house has been foreclosed.  The banks are still keeping your tax bailout, they are not returning it to you, me or anyone else.  They are being paid for the distressed property twice over.
> 
> ...


Nama own one of the biggest property portfolios in the world, plenty of spots within their stock.


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## gwavin (5 Dec 2012)

Wishes said:


> Our tax has already been fed into the banks.  The distressed mortgages are not benefiting from the tax that was pumped into these bankrupt banks.



Mate, the purpose of the tax was not to benefit the distressed mortgages. It was to benefit the banks, and there was never anything other than that intended. How exactly would "distressed mortgages" benefit from the bank bailout anyways? 
I presume you mean distressed mortgage holders, and that you mean that you would like some money. If I was to describe myself as a distressed renter, could I have some money please? 



Wishes said:


> In the few cases of repossession we have seen, most people are still reliable for the debt long after the house has been foreclosed.


I presume you mean liable for the debt. And what you are describing is what happens when one signs a binding contract. The terms of the contract... apply. It is actually that simple. 
if someone signs a contract, they have to adhere to the terms. Simply reading those terms and thinking about the future would have saved anyone who signed a contract which they now find they don't like very much. 



Wishes said:


> The banks are still keeping your tax bailout, they are not returning it to you, me or anyone else.  They are being paid for the distressed property twice over.


No, I think you'll find they are being paid once. In accordance with the contract which was signed with the house and the mortgage central to it. What you and everyone who is remonstrating about the terrible banks are on about is how you would like contracts (upon which the law and all modern business is based) not to count if you don't like them once you've used them for a while. 



Wishes said:


> There is a five year waiting list for a council house.  Where do you propose to house the repossessed?
> 
> If we issue them with rent allowance, we are looking at bailout number two.


That is a completely separate issue. What you are asking is that the housing market be completely  paralysed, with hundreds of thousands of people frozen out of it, for the benefit of people who signed contracts and now want to ignore those contracts, and continue to live in houses which they cannot afford and are not paying for. 

I'm sorry, as a renter, who spent many years being sneered at for renting when I was crazy for not getting my foot on the ladder, I'm ****ed if I will ever agree with anyone who tries to suggest that contracts should cease to exist for a special chosen few who happened to buy at a foolish time for a foolish price.


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## lovelyhorse (5 Dec 2012)

lovelyhorse said:


> Nama own one of the biggest property portfolios in the world, plenty of spots within their stock.



Oh and I forgot to mention the fact that they are free to rent a home that they can afford on the open market, same as anyone else. "Owning" a house is not a human right. Just because they cant pay their jumbo tiger mortgage does not mean they cannot afford to rent somewhere that suits their means.


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## Kerrigan (5 Dec 2012)

gwavin said:


> I'm sorry, as a renter, who spent many years being sneered at for renting when I was crazy for not getting my foot on the ladder, I'm ****ed if I will ever agree with anyone who tries to suggest that contracts should cease to exist for a special chosen few who happened to buy at a foolish time for a foolish price.



By any chance are you a civil servant or a banker?

With attitudes like this the country will be paralyzed for decades.  

There is more than a "few" who purchased at the wrong time and those that did were sold a pipe dream.  

What do you think about people going bankrupt?


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## Kerrigan (5 Dec 2012)

lovelyhorse said:


> Oh and I forgot to mention the fact that they are free to rent a home that they can afford on the open market, same as anyone else. "Owning" a house is not a human right. Just because they cant pay their jumbo tiger mortgage does not mean they cannot afford to rent somewhere that suits their means.



You speak about "they"as if they were a bunch of lepers.  "They" are your fellow citizen, who you and I will need to stay solvent to spend in our businesses and help create jobs. 

You are throwing the life jacket out of the raft.

I suggest if you want some sort of revenge go and take it out on the Government or the Bankers.


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## gwavin (5 Dec 2012)

Kerrigan said:


> By any chance are you a civil servant or a banker?



No, I'm not. If I was in either of those positions, wouldn't I be far more likely to have purchased, and thus be braying for other people's money. 



Kerrigan said:


> With attitudes like this the country will be paralyzed for decades.


No, you know what, you're completely right. What will push this country forward into the next upsurge in prosperity is if we completely pay off the mortgages of everyone who bought in the years 2004 to 2007, and if they're very good, those who bought 2007 to 2009 as well. 

Paralysis is what is occurring right now; the moratorium on repossessions has almost completely frozen the property market. If the banks had been allowed to repossess in the same way as they do in the UK, the market would be seething. 



Kerrigan said:


> There is more than a "few" who purchased at the wrong time and those that did were sold a pipe dream.


My words were "chosen few," I was referring to the 'special' nature of those who consider themselves above paying their mortgages rather than their numbers. However, now you mention it, relatively few of the population are in a situation where they are going to be in danger of losing the houses which they do not own and have failed to keep up adequate and legally agreed payments upon. (The house becomes 'owned' when the mortgage is paid in full, and no longer has a mortgage on it). Relatively, compared to the total population, that is. 



Kerrigan said:


> What do you think about people going bankrupt?


I think it is unpleasant, and actually, I think that we would be in agreement were we to discuss it at length. I think that if one party is foolish enough to enter into an agreement with any other party, they have to consider the downside themselves. 
What I mean is, someone should be able to walk away from their house and all their debts, and re-enter the world, free of obligations, after an appropriate period. The potential 30 year period here is ludicrous.


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## gwavin (5 Dec 2012)

Kerrigan said:


> You speak about "they"as if they were a bunch of lepers.  "They" are your fellow citizen, who you and I will need to stay solvent to spend in our businesses and help create jobs.
> 
> You are throwing the life jacket out of the raft.
> 
> I suggest if you want some sort of revenge go and take it out on the Government or the Bankers.



Nice. I've just realised that I've been living with leprosy for the last ten years. Hang on a sec, while I go and buy a house, that I might become clean.


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## lovelyhorse (5 Dec 2012)

Kerrigan said:


> You speak about "they"as if they were a bunch of lepers.  "They" are your fellow citizen, who you and I will need to stay solvent to spend in our businesses and help create jobs.
> 
> You are throwing the life jacket out of the raft.
> 
> I suggest if you want some sort of revenge go and take it out on the Government or the Bankers.



I get the feeling you may be projecting your own stereotype that people who rent are "lepers" or some kind of lower or second class citizen? What is wrong with renting? I am alive and well and doing that myself. I dont consider myself a leper. 

More sustainable property prices are actually the life jacket, if we do not have to spend 40 or 50% of income on overpriced shoe boxes then we can compete with other countries for MNC jobs. Are we not more attractive for corporations if our labour is cheaper in international terms? Property prices can only come down if the reset happens, it is painful and no doubt distressing for a family whose home is repossessed but why myself and my cohort are being expected to subsidise peoples poor investments, i.e. their homes - which in turn raises prices for us I find crazy. Call it self interest or attempt to label me selfish but if it is a case of choosing if I pay for a nice home for all you guys or a nice home for me that I have saved for and buy at the free market rate without borrowing a boatload then apologies but I pick me. 

If a leper is how YOU choose to label someone who lives within their means, even if that involves renting, then I am proud to suffer from leprosy. How bout those crying out for debt forgiveness take responsibility for their own actions and remember their fellow citizen who wants the same things as they do, but didn't just go borrow for them and realise they have to pay for things themselves?


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