# Frontline programme on mortgage arrears and negative equity



## Brendan Burgess

Last night's Fronline programme fell way below its normal standards of objectivity and Pat Kenny's normal standards. It was very onesided.

*The Panel
*The Panel consisted of 
Ciarán Lynch - Labour TD
Ross Maguire - New Beginnings
Constantin Gurdgiev
Ronan Lyons  - Daft.ie 

No Irish TD has the backbone to point out to consumers that they have made mistakes and that they have to pay for them. Ciarán who is genuinely interested in the housing issue is no exception. 

New Beginnings spend their time defending people trying to counter bank repossessions. 

Both Ronan Lyons and Constantin Gurdgiev have called for widespread debt forgiveness which would cost the taxpayer, according to their calculations, up to €49 billion

Why was there no one on the panel who opposed widespread debt forgiveness? Declan Jordan of UCC, Séamus Coffey of UCC, Professor Gregory Connor of Maynooth, myself?  Even a three to one against panel would have been unbalanced, but at least it would have been less unbalanced.

*The case studies were simply not probed at all 

The Clonee couple* who featured in the programme. They had bought a two bedroom apartment a few years ago. They were worried about the future. They were meeting their repayments but what if one of them lost their job?  But bizarrely, two years ago they had applied to the bank to trade up with a negative equity mortgage. The bank had laughed at them. They were critical of the bank. But they should be grateful to the bank. If they had traded up , they would be in much more severe negative equity and their repayments would be much higher. Their worry about losing their job would be far worse. 

*Ken *bought an apartment "with his father on the deeds" a few years ago for €300k and it's now worth €90k. He is working in sales and has never missed a repayment.  The bank won't do anything for him. What does he want the bank to do? Reduce the repayments which he and his father can well afford? Ken has a Facebook page mortgagedebtforgiveness

I am sorry for people in negative equity, but if they can pay their mortgage, then they must do so. 

*The €1m mortgage woman *bought a house with a €1m mortgage a few years ago and got an offer of €500k last year for it. The bank refused to let her sell it. Again, I have sympathy but there was no personal background given. She was wealthy enough to borrow €1m a few years ago and now the house is rented. It's likely that the rent received and her own income is easily enough to cover the repayments. Why should the bank let her sell? 

*The public servant who has not paid her mortgage since December 2010.  *She was in her early fifties and put all her savings into a house. She could not get the bank to agree anything and her income has reduced as a "professional public servant". So her response has been to put €1,000 a month into a separate bank account until the bank agrees. Every option that the bank discusses involves repossession. It is very unusual for a bank to suggest repossession, so we were not getting the full story. Mind you, if she has not paid anything towards  her mortgage for 10 months, then there should be a fast-track court procedure to repossess her house. 
Update: This case  is discussed in detail in this thread : Caroline Lennon Henry Posterwoman for Mortgage Arrears

*For comparison - The Cork couple who featured on Richard Curran's programme before Frontline
*A couple with three young children. He lost his job. She had a part-time job so she increased her hours and he minds the kids combined with a Social Employment Scheme. Things got to breaking point and they could not afford the €600 monthly mortgage payment. What happened? They went into Ulster Bank who assessed their position and reduced their repayments to €200 per month for 12 months. This is exactly how it is working in reality. A borrower gets into trouble. They cut back. They act responsibly. They talk to their bank who assesses their needs and the bank facilitates them. 

*Pat Kenny's approach 
*was extraordinarily one sided. He accused the bank who had lent to Ken and his father of wanting to "grab his father's pension, although he had signed the paperwork".  

He never pointed out how lucky the Clonee couple were that the bank had not allowed them to trade up.

He told the woman who had borrowed €1m whose house was worth only €500k that the banks were not paying for their mistakes. They were professionals who were used to valuing houses. She had bought only one house and had made a mistake and she was carring the can for their joint mistake. 

He kept repeating that the banks had made "300,000 mistakes" i.e. the number of people in negative equity.

He referred sarcastically to "the wonderful code of conduct on mortgage arrears"

He said "I have a difficulty with this blanket rejection of the blanket rejection of debt forgiveness..."

He never put any difficult questions to those seeking debt forgiveness, in fact he puts his words into their mouths.  By contrast, he badgered Ciarán Lynch who tried to explain the government's position. 

I was so annoyed at the programme that I had to switch it off half way through. I knew that The Property Pin contributors would be going absolutely mad and indeed they were. See here They were throwing stuff at the television. 

*The last Frontline programme on the topic showed the other side of the argument
*One of the panel, Declan Jordan, effectively challenged Brian Lucey's proposals on Debt Forgiveness. 
I was in the audience and was able to explain why the Expert Group had recommended against it. 
There was a German(?) who had a high mortgage and was very opposed to debt forgiveness. 

We were in an unpopular minority, but at least, the view was heard.


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## Brendan Burgess

OK, I have watched the second half of the programme. 

How can  a serious current affairs programme give such publicity to the New Beginnings proposal? 



Mortgage|€340k
current monthly repayment|€1450
Interest element|€917
Monthly disposable income|€2400
Mortgage switched to interest free|€80k
Proposed repayment|€840Ken can pay his mortgage in full and still have €1,000 a month to live on. He appears to be a single guy. 

The best solution for Ken is to repay the capital as quickly as possible. Not to pay less than the interest on the mortgage and so watch the balance outstanding rising. 

This was greeted enthusiastically by Pat Kenny as Win, Win, Win. 

It's actually Lose, Lose, Lose.

It's lose for Ken as the balance will continue to rise on his mortgage. 
It's lose for the bank as the negative equity will continue to rise and their chance of a write-off will continue. 
It's lose for the tax payer if we own the mortgage. 

Let's remember a key fact, Ken has a joint mortgage with his father. If  Ken can't pay the mortgage, then his father should as this is what he  agreed to do. The lender would not have given him the mortgage without  the father's name  on it.


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## Brendan Burgess

This type of programme does enormous damage to people who are struggling with their mortgage. 

The biggest mistake that people make is that they bury their head in the sand. They don't talk to their lender or they leave it very late to talk to their lender. The Frontline programme last night would discourage people from talking to their lenders because anyone watching the programme would simply assume that there was no point. 

The reality is that 70,000 (check number?) borrowers have successfully rescheduled their mortgages. 70,000 people have reduced their monthly payments with the agreement of their lenders. The Cork couple in Richard Curran's programme suffered unnecessarily because they didn't approach Ulster Bank early enough.  The guy from Tralee who refused to feed his children so that he could pay the mortgage is another example. He had probably watched a programme similar to The Frontline.


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## Bronte

I have not seen the programme, but a few weeks ago there was another programme on this topic and no full background was given to the stories on offer. I mentioned it on here at the time. 

In relation to the Cork couple, who are reduced to 200 Euro monthly mortgage repayments for one year. After that year or two a decision should be made by the bank to write off part of the mortgage. There is no point people being long term on reduced mortgages as the costs and arrears are building up to an unsustainable level. 

There seems to be a public mood that one cannot say actually the bank are treating you ok, you signed for this, what do you expect, but we are all supposed to be sympathic, depending on the circumstances one can be sympathetic, but the belief that everybody in negative equity should have their debt forgiven is a growing belief. We have a thread on here on this and woe betide any of us who don't agree with it.


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## onq

(nods)

I wholeheartedly endorse your comments Brendan.

The only positive point I took from the problem was that in comparison to Japan, our government moved relatively swiftly and decisively to address our crisis.
I felt that talk of 2015 was unduly negative - we're seeing signs of life even this year, and I would hope that 2013 will see us well on the way to recovery.

The image presented of the mortgage provider was that of an institution that would not listen to people's problems. I have found this is not the case.
In particular the rescheduling of the mortgage was presented in a manner that did not reflect what I know of the way such things are addressed.

Re-scheduling a mortgage is done on a year-by-year basis, there is no automatic roll-over effect and it requires a form of means testing.
The fact that the couple had had their mortgage re-scheduled should have been a far greater cause for positivity for mortgage holders.

Yet the presentation in the documentary was one of doom-and-gloom "all our hopes dashed" and "we're living on top of each other".
Few people are in a place they would like to remain in at the moment, with a hard budget looming, but let's all try to be positive.


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## monagt

Declan Jordan of UCC, Séamus Coffey of UCC, Professor Gregory Connor of Maynooth, myself.
3/4 in feather bedded civil service jobs.



> I am sorry for people in negative equity, but if they can pay their mortgage, then they must do so.


I dont think you are Brendan, what if they can pay the mortgage and little else? Impoverished but in a home.

The Icelandic option of reducing all the mortgages on homes to 110% was an interesting point. (case by case and not for mansions)

Its basically Have vs Have Nots, those that took too big a chance to a get a home and those who waited and now have Schadenfruede.

A Lost Generation was mentioned by Ronan (I think), Is this what we are, a community that saves the banks and won't save our young families.

No comment on the cases raised.


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## onq

@ monagt

That seems to be an unfair comment on Brendan and unnecessary.

I do not habitually defend Brendan's position on financial issues.
However there are very some basic rules on debating.
"Attack the man's reasoning, not the man" is one.

Brendan used the term "if they can pay".
This implies a test whether this is so.
Ability to pay bills would be a factor.


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## Mpsox

I watched the programme before Frontline but make a habit of never watching Pat Kenny, mostly for the reasons outlined above

I do wonder if there will be a case for mis-selling mortgages in Ireland in the near future. This happened in the UK with endownment mortgages in the past and when you hear of cases like Smart Mortgages giving 30 year mortgages to people in their 40s, then you have to wonder if the banks exercised their legal duty of care. Industry sources that I know also indicate there is a huge issue with incomplete paperwork in the banks for loans and mortgages and this would also undermine any defense they may have. If they cut corners to get commisions, they should pay a price, regretably, it may be the taxpayer that pays the price for them

On your comments on the couples in neg equity and those who had approached and been granted some leeway by the banks, a year is not going to be long enough for most people. It could take some people 3-5 years to get back to work, and given the increase in taxes and decreases in salaries, it may take them some time to get back to a stage where they can afford their repayments.

I'm probably in neg equity but am in full time employment and can afford the mortgage. I don't expect anyone to cut my mortgage, but, touch wood, this is the last home I'll be buying anyway. There needs to be a long term solution for those who want to move and cant. Take that couple in Meath, were they to buy a house, the likihood is that the value of their house + neg mortgage balance would equal the value of their current mortgage (which they can afford).


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## monagt

> That seems to be an unfair comment on Brendan and unnecessary.
> I do not habitually defend Brendan's position on financial issues.
> 
> However there are very some basic rules on debating.
> "Attack the man's reasoning, not the man" is one.
> 
> Brendan used the term "if they can pay".
> This implies a test whether this is so.
> 
> Affording food would be a factor.



Not meant as an attack on Brendan but on his consistent point of view which I feel is not balanced.
I think there is more than just money involved, there are many people in misery, most are young people & couples & couples with children.


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## Harry31

I only watched a bit of the programme - I've taped it so will watch later - I agree that the backgrounds given were not the full story.  While I also feel sorry for people in negative equity (I'm in the same position with a rented house I bought, but luckily it is rented out at the moment), if you can pay your mortgage then why wouldn't you?  The young couple in the apartment - ok it's not ideal - but many people brought up families in conditions & houses which were not a patch on their apartment.  I didn't see the woman who had a 1m€ mortgage, but I did see a similar programme which featured a  woman who hadn't paid her mortgage for a year & she had a huge mortgage - she was still taking her kids to horse-riding lessons!  Now I'm not an expert, but if I was in dire financial straits I'd prioritize my spending & that certainly wouldn't even come into it.  When people look at their outgoing when trying to balance their budgets, a lot of them include things like Sky!  There has to be some sense of personal responsibility here.


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## MrMan

monagt said:


> Not meant as an attack on Brendan but on his consistent point of view which I feel is not balanced.
> I think there is more than just money involved, there are many people in misery, most are young people & couples & couples with children.



I would have to agree with Monagt here on both counts. The fact that Brendan wanted to give his view to counterbalance the 'biased' view on the show sounds a bit like two wrongs...

I would have been more in the 'people take responsibility camp' before, but I do now feel that society is becoming damaged through the massive weight on peoples heads, and even though they got into the mess themselves as adults, do we as a civilised society just tell them to suck it up and get on with things? 
The New Beginnings solution seemed like a good approach, but I have yet to hear it being dissected.


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## Bronte

monagt said:


> I dont think you are Brendan, what if they can pay the mortgage and little else? Impoverished but in a home.
> 
> .


 
Aren't most people who start out with a mortgage generally only able to pay the mortgage and little else.  It is a normal way to be?


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## Firefly

A big +1 to your first post Brendan. 

That young couple from Clonee....they have no garden...big deal! Get on with it and make the most of what you have. Plenty families reared in apartments all over the world. It may not be ideal, but hardly the end of the world. 

The "professional" civil servant really got on my nerves. Just because a "substantial" amount of her savings into doing up her house (which I'm sure she bored her dinner guests with) and her income (which I'm sure is still pretty decent) has been reduced, she has decided not to pay her mortgage. If her salary had not been cut but instead interest rates went up, would she have stopped paying her mortgage also? It's people like her IMO who are not helping those in real need here....if someone like her were to get a writeoff then every Tom, Dick and Harry would stop repaying their mortgage.

I feel a bit sorry for the family from Cobh..it looks like they are doing what they can and the bank in fairness have responded. It was clear to me that if they were put back on the original repayments they would probably just emigrate and take their chances, so it's in the banks interest to get something rather than nothing.

The salesman made me laugh I must say. He basically made a poor financial investment (it doesn't sound like he bought a home for life) and now wants you and I to pay for it. 

Having said all of that I thought the New Beginnings idea had a major flaw....the repayments are limited to 35% of disposable income. Sounds like a poverty trap to me....the more I earn the more I pay the bank for something that I already have the full use of? It becomes another tax and will further promote the black economy. I also think this option will be unworkable from am admin perspective...who will monitor if the repayments are really 35% of income? I think the bank taking an equity stake in the property for a corresponding write-off of the mortage would be more equitable and more easily implemented. The mortgage holder could have the option of buying back this equity stake at any time for an agreed premium.


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## monagt

> Having said all of that I thought the New Beginnings idea had a major flaw....the repayments are limited to 35% of disposable income. Sounds like a poverty trap to me....the more I earn the more I pay the bank for something that I already have the full use of? It becomes another tax and will further promote the black economy. I also think this option will be unworkable from am admin perspective...who will monitor if the repayments are really 35% of income? I think the bank taking an equity stake in the property for a corresponding write-off of the mortage would be more equitable and more easily implemented. The mortgage holder could have the option of buying back this equity stake at any time for an agreed premium.



Sounds like a poverty trap to me.

+1

http://www.independent.ie/opinion/editorial/plan-wont-cure-mortgage-woes-2901595.html



> Interesting when Irish establishment is dismissing debt forgivness, Clinton on Sat said without forgiveness, no recovery! Wasn't reported!


 David McWilliams


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## csirl

> *The Clonee couple* who featured in the programme. They had bought a two bedroom apartment a few years ago. They were worried about the future. They were meeting their repayments but what if one of them lost their job? But bizarrely, two years ago they had applied to the bank to trade up with a negative equity mortgage. The bank had laughed at them. They were critical of the bank. But they should be grateful to the bank. If they had traded up , they would be in much more severe negative equity and their repayments would be much higher. Their worry about losing their job would be far worse.


 
This couple bought an apartment that they knew was not suited to their family situation with the intention of selling it at profit after c.2 years. They are pure speculators who've got caught out by the market.  They should have bought something more suitable (though possibly in a less desireable location) or rented until they could afford a house. They cannot be compared to someone who bought a property for the right reasons and is now stuck.



> Mortgage€340kcurrent monthly repayment€1450Interest element€917Monthly disposable income€2400Mortgage switched to interest free€80kProposed repayment€840


 
The 50 billion dollor (or euro!!) question is who is going to pay the interest on the "Mortgage switched to interest free" portion of the mortgage? The bank has borrowed this and will be paying it during the 10 year period.


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## Brendan Burgess

MrMan said:


> The New Beginnings solution seemed like a good approach, but I have yet to hear it being dissected.



Hey Man

I have analysed it in this post which you might have missed.


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## Brendan Burgess

Paul Cullen of the Irish Times explained that Icelandic mortgages were capped at 110% of the value of the home. 

But he didn't explain that they had develued their currency and that a lot of Icelandic mortgages were denominated in foreign currencies. 

As they had a spike in inflation, I presume that their interest rates skyrocketed as well? 

I just don't think that the comparison of Iceland to Ireland stands up.


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## monagt

> Hey Man, I have analysed it in this post which you might have missed.



Analysis is correct but what about looking at the possible effects of Inflation and rising property rises in 10 years?


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## Gekko

csirl said:


> This couple bought an apartment that they knew was not suited to their family situation with the intention of selling it at profit after c.2 years. They are pure speculators who've got caught out by the market. They should have bought something more suitable (though possibly in a less desireable location) or rented until they could afford a house. They cannot be compared to someone who bought a property for the right reasons and is now stuck


 
Not true.

They bought the apartment because they wanted a home and wanted to get on the property ladder.

In a rising market their next home (a house) would obviously have been more expensive and would have risen more than the apartment in the intervening 2 year period.

I'm sure that they bought the apartment because they couldn't afford a house.

I fully support government intervention to assist people like the Clonee couple because in their case negative equity is causing social problems (i.e. they can't exapnd their family).

I disagree with Brendan's point regarding this couple.  The key point is that they're stuck in an unsuitable property.  Negative equity is (relatively) okay if you're in a property that's suitable in the long term and you haven't lost your job or had your earnings devastated.


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## Purple

It was like a re-run of the programme they did on debt forgiveness but with only one side invited back.
The “professional” civil servant didn’t do herself, civil servants in general or people in negative equity in general any favours. She “only” allowed €50 a week for personal grooming and clothes. My wife wouldn’t spend that and we’re not in financial trouble.


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## RIAD_BSC

This is such an emotive argument, it always creates more heat than light. People always mix up negative equity with arrears, and they are both different issues with different solutions and different consequences.

I get it that people are sick of bailing out the banks, and don't want to bail out mortgage holders too, especially if they are working hard to pay off their own mortgages. But sometimes, I am shocked by the lack of empathy and sympathy for people like the Clonee couple. There is a real social and economic issue there that needs to be addressed. It won't go away, no matter what the moral hazard.

FWIW, here's my tuppence worth.

1 - People in NE should not receive state help just because they are in NE. They should continue to repay their mortgages if they can afford to, NE or not.

2 - People in deep NE who are also deep in arrears, and are unlikely ever to be able to meet their mortgage repayments, should have some of their debt written down by the banks so they can get on with their lives. This is what happens with unrealistic debts in business, it happens in other countries, and it is the most sensible thing to do. However, this should not apply to people who bought expensive homes. Nobody should get a debt write off to allow them live in a mansion. Those people should be forced to trade down to modest homes as part of the package.

3 - People deep in arrears who are not in NE should be forced to sell their homes to pay off their loans. That's just simple loan security enforcement. If they have equity, they don't need anyone's help, the state's or the banks'.

4 - People who are deep in NE, have good solid incomes, but are desperate to move for whatever reason (job offer in another city, tiny high-rise apt that may be unsuitable for raising children, etc....), the banks need to work with these people to find solutions for them. The state doesn't need to help them, except maybe by changing the rules re TRS etc so that they are not too heavily penalised for renting out their apts, and moving to become renters in more suitable family homes.

And the general public really needs to show people like the Clonee couple some basic compassion - we live in a society. Looking at some of the comments on this thread and elsewhere, you'd swear we were at a Sarah Palin rally (The Irish Milky Tea Party?) These people are not the enemy.

Finally, Clinton was right. Moral hazard aside, the economy will never recover unles the mortgage issue is addressed in some way. Consumer spending will never return with 300,000 households in NE who don't know what's around the corner. I'm not saying they should all be helped just 'cos they are in NE, but unless those people know there is some sort of help potentially available to them should they really, really desperately need it, they will never spend a penny again, and unemployment will stay high.

This isn't just all about fairness and moral hazard. It is also about what's right for the society we live in and the country and the economy as a whole. Recovery should come first. For a recovery, we need solutions to the mortgage crisis. There is no point in pretending the issue will just go away over time. That's just ostrich head-in-the-sand stuff.


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## csirl

Gekko said:


> Not true.
> 
> They bought the apartment because they wanted a home and wanted to get on the property ladder.
> 
> In a rising market their next home (a house) would obviously have been more expensive and would have risen more than the apartment in the intervening 2 year period.
> 
> I'm sure that they bought the apartment because they couldn't afford a house.
> 
> I fully support government intervention to assist people like the Clonee couple because in their case negative equity is causing social problems (i.e. they can't exapnd their family).
> 
> I disagree with Brendan's point regarding this couple. The key point is that they're stuck in an unsuitable property. Negative equity is (relatively) okay if you're in a property that's suitable in the long term and you haven't lost your job or had your earnings devastated.


 
Dont want to personalise the argument to this particular couple - as none of us know the true circumstances.

To play devils advocate:

I think the argument that couples like this should be helped may be a big red herring. Think about it.

Say a couple has a neg equity apartment in Dublin communter belt with a mortgage of 1,500 per month. They need a house as they want to raise a family. Why do they need a 'bailout' instead of doing the following?

If they rented the apartment out, they'd probably get c.600 per month after tax income. For only €50 per week more they could rent a 3 bed semi in a working class area of Dublin (I assume they are commuters). If they could not afford the €50 per week more, they could reschedule the mortgage and/or go interest only for a while. 

The problem is that people like this find paying €1,500 per month for an apartment that is deep in neg equity unpallatable. They want someone to come along with an easy way out for them. They are not prepared to take control of the situation themselves and solve it as suggested above. Their problem isnt that they cannot move into a house (because they can), its that they are resentful of paying such a high mortgage for a neg equity apartment.


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## Bronte

csirl said:


> The problem is that people like this find paying €1,500 per month for an apartment that is deep in neg equity unpallatable. They want someone to come along with an easy way out for them. They are not prepared to take control of the situation themselves and solve it as suggested above. Their problem isnt that they cannot move into a house (because they can), its that they are resentful of paying such a high mortgage for a neg equity apartment.


 
In the case outlined on the programme, the couple could afford the mortgage, in fact they could afford a higher mortgage as they had wanted to trade up.  They can do as you suggest, rent out apartment and rent a property suitable for themselve.  Or they can overpay the mortgage to bring down the negative equity and sell.  But it would be far nicer for the bank to just lob 100K or whatever off the mortgage and the tax payer will pay for it as Riad is suggesting.  

Riad who has not had sympathy or empathy on this thread today?


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## The Ghoul

Agree 100%, an appalling programme. I nearly put my foot through the TV at the "professional public servant" and "win win win" comments. 

I'm normally pro public servant and defend what I see as attacks on public servants' pay, pensions and conditions by the gutter media. But that woman did the public service no favours.


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## RIAD_BSC

Bronte, perhaps you should re-read my first post. I never said the Clonee couple should have anything lobbed off their mortgage, 100k or otherwise. I said the bank should help them find a solution, i.e. a NE mortgage if they can comfortably make the repayments. I also said the tax system should not penalise them if they choose to rent out their apt, and rent a larger home for themselves. Currently, it would treat them like professional investors, which they clearly are not.

The only ones who I suggested should possibly get any write-offs are those deep in NE who are also deep in arrears, and unlikely ever to emerge from it.

As for sympathy, I believe someone on this thread has already called the Clonee couple "speculators who got caught out". That, to me, is neither empathetic or sympathetic. It is just plain unkind, because it is knowingly and patently untrue.


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## Brendan Burgess

The Ghoul said:


> I'm normally pro public servant and defend what I see as attacks on public servants' pay, pensions and conditions by the gutter media. But that woman did the public service no favours.



I agree fully with you. In fact, a conspiracy theorist might think that she had been put up by those opposed to debt forgiveness to give the perfect example of why it should not be entertained. 

But she is not typical of the public service and don't allow her to influence your attitudes.


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## Brendan Burgess

Purple said:


> It was like a re-run of the programme they did on debt forgiveness but with only one side invited back.
> .



Purple - you got it in one with that comment.


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## Brendan Burgess

An interesting approach from one of the guys on The Property Pin in response to a question on what does anyone intend to do about the Frontline Programme. 



> Yes, I for one plan to stop paying my TV licence.
> 
> I first paid my TV  licence in the post office back about 8 months ago. They never stopped  me paying it or ask if i was sure that i would receive the quality  programs that i thought i was getting. Instead they made it so easy to  pay.
> 
> Everyone talked about how good the prgramming was on RTE, we  had newspapers talking about this US sit-com, that Irish drama. The  media hyped it up, everyone else was paying it, so I felt pressurized  into paying it.
> 
> Now a few months into my contract, i realise that I  overpaid for the service. The service is worth about half what i paid.  Its a real David and Goliath, for me to go up against RTE, arguing that  they should improve their service. I approached the post office about  it, and they say there is nothing they can do about it. They could look  at restructuring future payments on a monthly basis, but licence fee  forgiveness was out.
> 
> Can't they see, that I'm being penalised here,  along with everyone else that paid the TV licence, yet others like the  unemployed were allowed rebates. They say they apply rebates on a case  by case basis. They needs to be a blanket refund of the licence fee.  Otherwise, aggregate expenditure in the country is going to suffer for  many a year. Its about time that the top earners in these institutons  stop getting paid the massive salaries as we struggle to survive, when  they were equally to blame for the increases in the licence fee.
> 
> John, D14


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## demoivre

Brendan Burgess said:


> *The €1m mortgage woman *bought a house with a €1m mortgage a few years ago and got an offer of €500k last year for it. The bank refused to let her sell it. Again, I have sympathy but there was no personal background given. She was wealthy enough to borrow €1m a few years ago and now the house is rented. It's likely that the rent received and her own income is easily enough to cover the repayments. Why should the bank let her sell?



No there was no background given so maybe she wasn't that wealthy at all but the bank loaned recklessly and gave her a six or seven times salary multiple, or gave her a three year fixed rate knowing she wouldn't pass the stress test if given a variable rate! Maybe they gave her a 100% mortgage, or the first five years interest only or maybe they were allowing for her to rent a room! In general why should the bank not suffer some of the consequences if they loaned recklessly?



RIAD_BSC said:


> Finally, Clinton was right. Moral hazard aside, the economy will never recover unles the mortgage issue is addressed in some way. Consumer spending will never return with 300,000 households in NE who don't know what's around the corner. I'm not saying they should all be helped just 'cos they are in NE, but unless those people know there is some sort of help potentially available to them should they really, really desperately need it, they will never spend a penny again, and unemployment will stay high.
> 
> This isn't just all about fairness and moral hazard. It is also about what's right for the society we live in and the country and the economy as a whole. Recovery should come first. For a recovery, we need solutions to the mortgage crisis. There is no point in pretending the issue will just go away over time. That's just ostrich head-in-the-sand stuff.



Couldn't agree more.


----------



## onq

monagt said:


> Not meant as an attack on Brendan but on his consistent point of view which I feel is not balanced.
> I think there is more than just money involved, there are many people in misery, most are young people & couples & couples with children.



Well, I can't fault you for noticing Brendan's consistency, but focus on the view, not the man.


----------



## onq

Brendan Burgess said:


> An interesting approach from one of the guys on The Property Pin in response to a question on what does anyone intend to do about the Frontline Programme.



(chuckle)

It would be a lot funnier if the license fee was optional or if RTE consistently produced incisive well balanced reporting on both local, national and world news.
All we get is the usual don't-rock-the-boat stuff which IN AND OF ITSELF has created conditions that have allowed the systemic corruption and lax standards we see in public regulation of commerce and planning development.
If we had public representatives that were held accountable by the Fourth Estate for inadequate regulation of the financial markets and bad planning decisions - BY LAW - we might see some changes in how the Gombeen Men run the show.

-----------------------

But in general I think the point was well made by the gentlemen from Dublin 4, the location itself being a nice irony.


----------



## onq

Brendan Burgess said:


> In fact, a conspiracy theorist might think that she had been put up by those opposed to debt forgiveness to give the perfect example of why it should not be entertained.



Not a peep from me on this.

Oh, all right then...

"...shurely such blatant manipalashun of the Oirish Meeja could never blah, blah, blah...<insert long monologue here>..."


----------



## onq

Bronte said:


> Aren't most people who start out with a mortgage generally only able to pay the mortgage and little else.  It is a normal way to be?



(nods)

That's the way we were.

Running a Renault 4TL for transport and sitting on garden furniture in the front room.

Luckily we had foreseen the interest rate crisis in the early 1990's and went for a 10.6% Fixed Rate Mortgage for 3 years instead of the 10.3% variable, which in a year had headed towards 14% IIRC.

Otherwise we wouldn't have survived, and even then, there was no going out for meals or sun holidays for a year or two.

We cut our cloth according to our measure and got on with it.

La plus ça change


----------



## csirl

The Ghoul said:


> Agree 100%, an appalling programme. I nearly put my foot through the TV at the "professional public servant" and "win win win" comments.
> 
> I'm normally pro public servant and defend what I see as attacks on public servants' pay, pensions and conditions by the gutter media. But that woman did the public service no favours.


 
What job does this woman do in the public service? This €50 per week in clothes/grooming requirement does not sound like a normal p.s. job, even for higher management. It's so incredible and false looking that I'm beginning to wonder if this is a real person, or just an actress playing a part to get a rise from the audience?


----------



## bugler

> I fully support government intervention to assist people like the Clonee  couple because in their case negative equity is causing social problems  (i.e. they can't exapnd their family).



That is not a social problem. 

I won't be expanding my family for the near future (we have one child) because I am the sole income earner and it isn't a prudent decision. Should I be given assistance?

I saw the preceding programme but gave the frontline a miss, sounds like I made a good decision.


----------



## demoivre

Brendan Burgess said:


> An interesting approach from one of the guys on The Property Pin in response to a question on what does anyone intend to do about the Frontline Programme.



The irony of complaining about the one sidedness of the Frontline programme, which it was, and then quoting from the Property Pin, is palpable. That website was originally supported by people ejected from AAM , who regularly lambasted you , and whose only mantra for the last five or so years is property was/is overvalued.


----------



## onq

I thought that the irony of the PP post Brendan cited was that it was mocking the programme when you would have expected a post from that source to lay it on thicker - a double irony then?


----------



## Firefly

onq said:


> I thought that the irony of the PP post Brendan cited was that it was mocking the programme when you would have expected a post from that source to lay it on thicker - a double irony then?



You mean the irony of it all was that it wasn't ironic at all?


----------



## onq

(nods)

That would be pretty ironic if so.


----------



## Brendan Burgess

demoivre said:


> The irony of complaining about the one sidedness of the Frontline programme, which it was, and then quoting from the Property Pin, is palpable. That website was originally supported by people ejected from AAM , who regularly lambasted you , and whose only mantra for the last five or so years is property was/is overvalued.



You call it irony. I think it's a particularly funny and clever post which makes the point very well. 

RTE is the national broadcaster which presumably has a statutory duty to be responsible. The Pin has no such duty or no such pretence. 


(Fair play to Pat Kenny though - he has managed to get me to defend the activities of The Property Pin. That is some achievement.)


----------



## T McGibney

demoivre said:


> That website was originally supported by people ... whose only mantra for the last five or so years is property was/is overvalued.



Sounds a bit like the politician who said that reports of a homelessness crisis were just rumours being put around by people who had nowhere to live


----------



## Purple

Does anyone know what the procedure is to complain to RTE about this?


----------



## Marion

> It was shockingly unbalanced.



Why were there no present bankers on the Frontline programme?  I would have thought that they would have been interested parties?

Why was PK asking questions of a former banker who had no idea of the answers? 


Marion


----------



## Brendan Burgess

Marion said:


> Why were there no present bankers on the Frontline programme?  I would have thought that they would have been interested parties?
> 
> Why was PK asking questions of a former banker who had no idea of the answers?
> 
> 
> Marion



I think that there were two former bankers on the programme - a man towards the start and a woman towards the end. The man made no sense at all - or maybe it's just that I did not understand him.

The woman said that the staff were just following orders in the amount of the loans that they gave out.

Brendan


----------



## Marion

Thanks Brendan

I was watching it at the time on player and switched off before the end of the show as I didn't expect to see any banker turn up late on the panel. So, I didn't get to hear the second former banker in the audience.

What was the point of having former bankers on the show?

Just a thought: 

Is it in the public interest to know if PK is somebody in negative equity?


Marion


----------



## monagt

> Is it in the public interest to know if PK is somebody in negative equity?



NO, no more than having every poster on AMM declare his/her position, its his private business and now we are moving into witch hunt territory.


----------



## Marion

Hi Monagt

I'm not convinced. RTE is a public broadcaster funded by the taxpayer. AAM is an anonymous bulletin board.

Marion


----------



## Brendan Burgess

Hi Marion

It's very unlikely that Pat Kenny is in negative equity.  He has had his home for some time. His earnings are a matter of public record and would presumably have been sufficient to clear any mortgage he had on his home. 

I also think that he feels genuinely on the issue and is not pursuing a personal agenda. If he had such a personal agenda, he is too professional a broadcaster to allow it to interfere with his job.

He does seem very dogged on the issue and I don't know why. 

Brendan


----------



## MrMan

Brendan Burgess said:


> Hey Man
> 
> I have analysed it in this post which you might have missed.


 
I thought that the New Beginnings approach still had the owner paying the mortgage off over the full term just without interest on a ten year period (in Kens case).
The New Beginnings approach looks toward the possibility of freeing up disposable income which would benefit the economy.


----------



## Marion

Hi Brendan

I have no idea if PK holds any investment properties that might be in negative equity.

But considering the nature of his position and the programme that he presented I think that it would be in the public interest to know if negative equity were an issue for him.

Marion


----------



## onq

Brendan Burgess said:


> The woman said that the staff were just following orders in the amount of the loans that they gave out.



The Nuremberg Defense may work for the grunts but not the officers of the Banks and certainly not the Directors or Chairperson.


----------



## Brendan Burgess

_Purple asked 

_


> Does anyone know what the procedure is to complain to RTE about this?


_
These are the relevant extracts from the Complaints page of the RTE website _


*Making a Complaint to RTÉ*

_A complaint . shall be made to the broadcaster not more than 30 days after . the date of the broadcast_ *Section 47 (2) (a) 
*

(b) the broadcast treatment of current affairs, including matters which  are either of public controversy or the subject of current public debate  is fair to all interests concerned and that *the broadcast matter is  presented* in an objective and impartial manner and *without any  expression of his or her own views, *except that should it prove  impracticable in relation to a single broadcast to apply this paragraph,  two or more related broadcasts may be considered as a whole, if the  broadcasts are transmitted within a reasonable period of each other 



*Making a Complaint*

         If members of the public are of the opinion that a programme or a  segment of a programme or an advertisement broadcast on RTÉ  has:             
         .    breached  a provision of section 39 (1) (a), (b), (d) or (e) of the Broadcasting Act 2009 or             
         .    failed to comply with a provision of the BAI Codes.            
         they are entitled to express their views. A complaint may be made  by email to complaints@rte.ie or by writing to Information Office, RTÉ,  Donnybrook, Dublin 4.
*A complaints form is available here*
         RTÉ is committed to responding to all reasonable complaints  concerning programme content or advertising which are not considered to  be of a frivolous or vexatious nature . It is RTÉ's policy that all  complaints should receive meaningful replies which attempt to address  issues raised in complaints.            
         RTÉ is committed to the following:            
         All complaints received in writing or by-email shall be replied to  by an appropriate member of the production team within 20 working days.             
*Internal Review of Complaints            *

         If members of the public  who complain are not satisfied with the  response they have received there is a review process available to them  within RTÉ. The review will always be carried out by an Editorial  Manager senior to the member of staff who replied to the complaint in  the first instance. The request for an internal review should be sent to             
         Head of Broadcast Compliance,              
            RTÉ,              
            Donnybrook,              
            Dublin, 4.            
         or by e-mail to complaints@rte.ie

*Complaints to the Compliance Committee of the BAI         *

         Members of the public may complain to the Broadcasting Authority of  Ireland (BAI) if they are not satisfied with the response RTÉ has made  to their complaint.  The BAI will consider the complaint and may carry  out an independent review of the complaint and the response the  complainant has received.  Information on how to refer a complaint to  the BAI is available on the BAI website at www.bai.ie  or from the  following address.
          Broadcasting Authority of Ireland,              
            2-5 Warrington Place,              
            Dublin 2.              
         Telephone: (01) 644 1200


----------



## Brendan Burgess

> (b) the broadcast treatment of current affairs, including matters which   are either of public controversy or the subject of current public  debate  is fair to all interests concerned and that *the broadcast matter is  presented* in an objective and impartial manner and *without any  expression of his or her own views...*


It seems to me to be a very clear breach of this. 

I think that the presenter of a programme such as The Front Line has to make it interesting and controversial. 

What I find odd is that in the last programme, the balance was there. In this one it was not.

The timing was unfortunate in that it was on the eve of the publication of the Keane Report on mortgage arrears. Obviously the timing was chosen to follow Richard Curran's programme.


----------



## Luternau

In summary, but not defense of the Frontline programme. The thrust of the conversation was that something needs to be done to reduce the burden of debt/negative equity problem/crisis.

So, there are some things that could be done that are partially right, some that are wrong or not generally accepted as being the right thing to do.  Maybe there is no completely win win win solution - it is a crisis and that means making the best out of a bad situation. That does not guarantee a bed of roses for those offered assistance.

The political/official dithering on this is making Vicky Pollard look decisive. Yea, but no, but like, no not really, yea, but....no....but


----------



## thedaras

Am I correct in saying that the people feel the presenter was making his views on the subject known and was far from impartial?

Also, do people feel this is an issue because RTE is a public service broadcaster paid for by the taxpayer?

Or is it that in general people feel that the debate was too one sided regardless of whom was airing the programme.

I'm trying to make a comparison with say Vincent Brownes programme on TV3. Which in my opinion is very one sided.


----------



## monagt

> The biases the media has are much bigger than conservative or liberal. They're about getting ratings, about making money, about doing stories that are easy to cover.
> Al Franken



You folks are getting more hot and bothered by the post. So you don't agree with the program and believe it was unbiased because it did not give enough weight to your (biased?) point of view.
Get over it and move on, there will be other programs and other outcomes.

The only other option is to light your torches and march on RTE, burn it and then on to Dalkey to roast Pat (unless of course, he lets us see his property portfolio and bank accounts)


----------



## Purple

thedaras said:


> Am I correct in saying that the people feel the presenter was making his views on the subject known and was far from impartial?
> 
> Also, do people feel this is an issue because RTE is a public service broadcaster paid for by the taxpayer?
> 
> Or is it that in general people feel that the debate was too one sided regardless of whom was airing the programme.
> 
> I'm trying to make a comparison with say Vincent Brownes programme on TV3. Which in my opinion is very one sided.



However bad this particular show was Pat Kenny has never sunk to the levels of bias and bullying that Vincent Browne sinks to every night. Tonight with Vincent Browne is a vehicle for VB to vent his spleen. It's a sham, a mockery of proper current affairs programming.


----------



## Bronte

RIAD_BSC said:


> As for sympathy, I believe someone on this thread has already called the Clonee couple "speculators who got caught out". That, to me, is neither empathetic or sympathetic. It is just plain unkind, because it is knowingly and patently untrue.


 
I've now watched the podcast. 

In what way is it not true that the Clonee couple were not speculators who got caught out.  I consider the statement that they were speculators to be correct but that does not mean one is being unkind.  It's just a statement of fact.


----------



## ClubMan

monagt said:


> You folks are getting more hot and bothered by the post. So you don't agree with the program and believe it was unbiased because it did not give enough weight to your (biased?) point of view.
> Get over it and move on, there will be other programs and other outcomes.
> 
> The only other option is to light your torches and march on RTE, burn it and then on to Dalkey to roast Pat (unless of course, he lets us see his property portfolio and bank accounts)


Didn't see the programme so I can't comment on it but the discussion above seems for the most part to be reasonable enough. You seem to be implying that because a topic exercises some people it should be avoided which is hardly the point of a discussion forum...


----------



## Bronte

Luternau said:


> In summary, but not defense of the Frontline programme. The thrust of the conversation was that something needs to be done to reduce the burden of debt/negative equity problem/crisis.
> 
> So, there are some things that could be done that are partially right, some that are wrong or not generally accepted as being the right thing to do. Maybe there is no completely win win win solution - it is a crisis and that means making the best out of a bad situation. That does not guarantee a bed of roses for those offered assistance.
> 
> The political/official dithering on this is making Vicky Pollard look decisive. Yea, but no, but like, no not really, yea, but....no....but


 
Maybe that is the key point. There is a crisis and there is political dithering in dealing with it. The show was not balanced as no bankers or other people who deal with the coal face of actual debt gave their side, it was not balanced in that none of the 'cases' gave the full facts, in fact it was hard to see any case that was a desperate case. 

Maybe RTE/Pat Kenny are getting calls from people every day in a distressed case and Kenny is reflecting that to try and get politicians to act. The percentage vote in the polls for Mitchell and the reception the Kenny has been getting must be coming from somewhere, a deep sented belief that politicians made promises, have made cuts to ordinary people, but not themselves or their cronies, no real change in politics or business at the top. Bankers still in place. A very real anger in Irish society. 

For goodness sake why hasn't the government brought in bankruptcy legislation, just copy the British model or any model to sort out the mess quickly. We don't need more reports and dithering.


----------



## thedaras

Purple said:


> However bad this particular show was Pat Kenny has never sunk to the levels of bias and bullying that Vincent Browne sinks to every night. Tonight with Vincent Browne is a vehicle for VB to vent his spleen. It's a sham, a mockery of proper current affairs programming.



Couldn't agree with you more!


----------



## T McGibney

Bronte said:


> Bankers still in place.



 I thought most of the leading bank executives of the boom years were no longer in their jobs? Am I mistaken?


----------



## MrMan

ClubMan said:


> Didn't see the programme so I can't comment on it but the discussion above seems for the most part to be reasonable enough. You seem to be implying that because a topic exercises some people it should be avoided which is hardly the point of a discussion forum...



I think it is the fact that thread has been titled 'appalling program' due to the fact that the owner of this site holds a completely different view to that espoused on Frontline has led some of us to feel that this thread is more than a little biased.


----------



## ClubMan

As I say I haven't seen the programme but assuming that the original summary is an accurate reflection of its content then the programme certainly does sound biased and, arguably, appalling. Maybe I'll try to watch it on the _RTÉ Player _if I get time...


----------



## Firefly

Bronte said:


> In what way is it not true that the Clonee couple were not speculators who got caught out.  I consider the statement that they were speculators to be correct but that does not mean one is being unkind.  It's just a statement of fact.



I agree Bronte. Just because they are a young couple with a child and not some suave businessman with 20 properties does not mean they are not speculators. They bought with the intention of selling in 2 years for a profit.


----------



## onq

ClubMan said:


> Didn't see the programme so I can't comment on it but the discussion above seems for the most part to be reasonable enough. You seem to be implying that because a topic exercises some people it should be avoided which is hardly the point of a discussion forum...




That's in an ideal world ClubMan.


----------



## onq

Firefly said:


> I agree Bronte. Just because they are a young couple with a child and not some suave businessman with 20 properties does not mean they are not speculators. They bought with the intention of selling in 2 years for a profit.



I agree.

We bought our current house with the intention of raising our family in it, somewhere closer to my wife's family than we were living.

It'll probably see both of us out, so our only issue is paying the mortgage until then, as opposed to worrying about negative equity.

Does this indicate the reason why people are so exercised about negative equity - they bought into "The Ladder" view of property?


----------



## onq

MrMan said:


> I think it is the fact that thread has been titled 'appalling program' due to the fact that the owner of this site holds a completely different view to that espoused on Frontline has led some of us to feel that this thread is more than a little biased.




I agree.

Looking over the posts most are on topic and addressing the arguments, but the title of the thread would be improved if the word "Appalling" was removed and then

(i) replaced by "Recent" or 

(ii) the the date of broadcast inserted somewhere appropriate

That would return it to the customary unbiased form of thread title we are more used to in serious forums on AAM.

After all, there is a certain irony opining that the programme was biased with this thread title.

A thread that might be more appropriate in The Depths.

To be fair to Brendan, he is usually scrupulous in ensuring that neither bias nor libel creeps into threads or their titles.


----------



## DerKaiser

Brendan Burgess said:


> *The case studies were simply not probed at all *.


 
I think the true value of the show was to highlight the range of situations in which people believe they are entitled to help. Society needs to weigh up the situation to arrive at a consensus of who should be helped.

My tuppence worth:

Clonee Couple - No one is guaranteed their job and plenty of families live in apartments. Their major problem is that they are feeling sorry for themselves, as long as they are at work they should just get on with it.

Father on the deeds guy - It's a sad situation, but being a guarantor should mean that the combined incomes of the owner and guarantor are taken into account in terms of affordability.

Public servant - I suspect this is a case of having a very nice/saleable house. People who invested a lot of effort & savings into their home need to face up to the fact that all their effort and money has been wiped out. If they're fortunate enough to walk away to rebuild their lives with a mangeable debt, then they should suck it up.

Cork Family - Looks like they will simply not be able to afford to pay the mortgage and have enough left to live on. All the other situations are a distraction from the genuine cases that will require help.


----------



## kaplan

It might be useful to consider the quantum of unaffordable debt that cannot be repaid. Taking the central banks base line stress ratios for both mortgage and personal debt results in loan losses of €13bn. While these are accounting losses they nonetheless are useful when considering the scale and scope of solutions and underpinning agreements required to work out unaffordable indebtedness.  These agreements include those dealing with PDH mortgages and those dealing with other debts. 
The Kenny programme may have appeared biased as it leant towards the borrower and away from the lender. But it highlighted the plight of tens of thousands of people who have no voice and raised the hare on “debt forgiveness” which has many guises.  
The New Beginning proposal looks somewhat complex but nonetheless workable. What’s missing is detail on how the approach would work for a range of scenarios. There are many others – the central principle is cramming down mortgages to affordable levels – they differ on how the non-crammed down element is treated.  For example the mortgage debt group report includes a split mortgage option which crams down to 40% of NDI and warehouses the balance –albeit subject to interest capitalising during the warehouse term. 
What’s wrong with linking mortgages to affordability? Probably very little – the problem some people have is what happens to the balance.


----------



## onq

T McGibney said:


> I thought most of the leading bank executives of the boom years were no longer in their jobs? Am I mistaken?




If there's been an exodus or a cull, I am not aware of it.


----------



## productive

The bottom line is that if the state is offering write downs/debt forgiveness/ alternative arrangements to connected wealthy speculators and developers, it should be morally and legally responsible to offer the same treatment to the ordinary people. 

If the banks had of been left collapse as is the norm for a private enterprise, the current situation would not exist. The moral hazard has already happened in propping up the banks. Giving the ordinary people so leverage in dealing with the banks would be an attempt to correct the situation.


----------



## Sunny

onq said:


> If there's been an exodus or a cull, I am not aware of it.


 
Since 2008, about 90% of Directors have been replaced. More will follow in 2012.


----------



## Shawady

RIAD_BSC said:


> This is such an emotive argument, it always creates more heat than light. People always mix up negative equity with arrears, and they are both different issues with different solutions and different consequences.
> 
> I get it that people are sick of bailing out the banks, and don't want to bail out mortgage holders too, especially if they are working hard to pay off their own mortgages. But sometimes, I am shocked by the lack of empathy and sympathy for people like the Clonee couple. There is a real social and economic issue there that needs to be addressed. It won't go away, no matter what the moral hazard.
> 
> FWIW, here's my tuppence worth.
> 
> 1 - People in NE should not receive state help just because they are in NE. They should continue to repay their mortgages if they can afford to, NE or not.
> 
> 2 - People in deep NE who are also deep in arrears, and are unlikely ever to be able to meet their mortgage repayments, should have some of their debt written down by the banks so they can get on with their lives. This is what happens with unrealistic debts in business, it happens in other countries, and it is the most sensible thing to do. However, this should not apply to people who bought expensive homes. Nobody should get a debt write off to allow them live in a mansion. Those people should be forced to trade down to modest homes as part of the package.
> 
> 3 - People deep in arrears who are not in NE should be forced to sell their homes to pay off their loans. That's just simple loan security enforcement. If they have equity, they don't need anyone's help, the state's or the banks'.
> 
> 4 - People who are deep in NE, have good solid incomes, but are desperate to move for whatever reason (job offer in another city, tiny high-rise apt that may be unsuitable for raising children, etc....), the banks need to work with these people to find solutions for them. The state doesn't need to help them, except maybe by changing the rules re TRS etc so that they are not too heavily penalised for renting out their apts, and moving to become renters in more suitable family homes.


 
These are good points and are why IMO it is impossible to come up with a perfect scheme to help homeowners.
There are supposed to be 300,000 homes in negative equity but 35,000 in arrears. How many of these in arrears are also in negative and by how much? I know of one couple in arrears but not in neg equity.

There are undoubtly some hardship cases and I think the banks can work with these but I also suspect there are many people that in negative equity that want it wiped out just becasue they feel they were duped in some way.


----------



## Shawady

Brendan Burgess said:


> *The Clonee couple* who featured in the programme. They had bought a two bedroom apartment a few years ago. They were worried about the future. They were meeting their repayments but what if one of them lost their job? But bizarrely, two years ago they had applied to the bank to trade up with a negative equity mortgage. The bank had laughed at them. They were critical of the bank. But they should be grateful to the bank. If they had traded up , they would be in much more severe negative equity and their repayments would be much higher. Their worry about losing their job would be far worse.


 
Brendan, one general point about people trading up with negative equity mortgages.
As the the price of houses has fallen, so may the gap between the cheaper 'entry' house as the more expensive types.
For example, in the boom an apartment may have cost 300k and a 3-bed semi 400k. If both of these have fallen by 50%, they are now worth 150k and 200k respectively. However, the gap between the two has closed from 100k to 50k. It is possible that in some cases it would be actually easier for people to trade up if the bank let them move their negative equity.


----------



## Brendan Burgess

The public servant was on the News at One today on RTE.

She is a mother of 1. 

She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine) 

She bought her house(in Kilkenny I think?)  for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007) 

She has invested a lot in the house. 

She is involved in something called "Irish Homeowners Unite"


----------



## hastalavista

Brendan Burgess said:


> The public servant was on the News at One today on RTE.
> 
> She is a mother of 1.
> 
> She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine)
> 
> She bought her house(in Kilkenny I think?)  for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007)
> 
> She has invested a lot in the house.
> 
> She is involved in something called "Irish Homeowners Unite"



Could be this lady
http://www.linkedin.com/pub/caroline-lennon-nally/14/906/653

The bit I heard was even less coherent than on frontline


----------



## DerKaiser

productive said:


> The bottom line is that if the state is offering write downs/debt forgiveness/ alternative arrangements to connected wealthy speculators and developers, it should be morally and legally responsible to offer the same treatment to the ordinary people


 
1) But who pays? All you're doing is pitting the pool of taxpayers against the pool of struggling homeowners.

2) Debt is only written off where there is no chance of recovery. 

When limited liability development companies go bankrupt the banks have no comeback, there is literally no one the bank can recover money from and therefore it is written off completely outside of the banks control.

If a person manages to declare themselves bankrupt their debt will be written off. That is the equivalent process and represents the same treatment for "ordinary people" as for developers.


----------



## thedaras

Brendan Burgess said:


> The public servant was on the News at One today on RTE.
> 
> She is a mother of 1.
> 
> She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine)
> 
> She bought her house(in Kilkenny I think?)  for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007)
> 
> She has invested a lot in the house.
> 
> She is involved in something called "Irish Homeowners Unite"



Home owners unite on Facebook;
"	
This page is dedicated to all those Irish homeowners who are struggling to pay their mortgage and at risk of losing their home.
Description	
"If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same". 

She was getting lots of compliments on her page.


----------



## productive

DerKaiser. You are ignoring the facts. 100% of NAMA clients have had a debt write-off, for up to 50%. Many are also receiving annuals fees up to 200K and may be paid a % of the future sale. Most will keep their private home and are not being forced into bankruptcy. 

I think we all know the average Joe is being treated very different.


----------



## Purple

productive said:


> DerKaiser. You are ignoring the facts. 100% of NAMA clients have had a debt write-off, for up to 50%. Many are also receiving annuals fees up to 200K and may be paid a % of the future sale. Most will keep their private home and are not being forced into bankruptcy.
> 
> I think we all know the average Joe is being treated very different.



That's incorrect. The banks wrote down the debt when they were transferred to NAMA but the developers, for the most part, still owe the full amount.


----------



## Purple

thedaras said:


> Home owners unite on Facebook;
> "
> This page is dedicated to all those Irish homeowners who are struggling to pay their mortgage and at risk of losing their home.
> Description
> "If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after *being conned into taking out an unaffordable mortgage*, when everyone around you is admitting the same".
> 
> She was getting lots of compliments on her page.



Yea, that's right, we were all conned.


----------



## csirl

Purple said:


> That's incorrect. The banks wrote down the debt when they were transferred to NAMA but the developers, for the most part, still owe the full amount.


 
+ 1. The developers got no debt forgiveness and still owe the full amount.


----------



## DerKaiser

productive said:


> DerKaiser. You are ignoring the facts. 100% of NAMA clients have had a debt write-off, for up to 50%. Many are also receiving annuals fees up to 200K and may be paid a % of the future sale. Most will keep their private home and are not being forced into bankruptcy.
> 
> I think we all know the average Joe is being treated very different.


 
The average Joe isn't a limited liability company and will go to great lengths to avoid bankruptcy.


----------



## Sunny

csirl said:


> + 1. The developers got no debt forgiveness and still owe the full amount.



In theory. In reality all NAMA care about is recovering what they spent in the loans. As with the recent sale of UK loans, NAMA were shouting from the rooftops that they achieved 100% of the purchase price and interest. They didn't recover the full value of the loan that the banks gave and never will. The ugly side of NAMA is that developers will be treated differently but I understand why that is the case.


----------



## onq

This was posted on NAMA Wine Lake on 27th January 2011 recording the words of whistleblower Mark Daly, a FF Senator, during an interview with Pat Kenny.

http://namawinelake.wordpress.com/2011/01/27/ff-senator-accuses-nama-of-selling-loans-back-to-the-original-developers-at-below-market-values-%E2%80%9Ca-scam-of-monumental-proportions%E2%80%9D-he-claims/


This was posted on politics.ie on 13th September 2011.

[broken link removed]


This was posted on the The Irish Times on 5th of October 2011

[broken link removed]

I quote the following excerpts from the Time article -



> ...the late Brian Lenihan said in the Dáil on October 14th, 2009, when  speaking in reply to the debate on the second stage of the Nama Bill.He  said: “Another misplaced claim that has been made during the course of  the second stage debate is that this Bill represents a bailout for  developers. This is just not so.
> 
> “Let me be clear – Nama is not  designed to be and will not be permitted to operate in practice as a  bailout mechanism for developers who have operated irresponsibly.
> 
> “The amount a borrower owes will not change because of the transfer  of a loan from his bank to Nama. The agency will have a statutory duty  to maximise the taxpayers’ return and will therefore be expected to use  its entire means to this end. The Bill also provides the agency with the  wide range of powers it needs to pursue borrowers and enforce security.
> 
> “In  some cases this will mean that borrowers’ personal assets will have to  be assumed by Nama. In such circumstances, I cannot understand how the  misconception that Nama will bail out developers continues to run.”


That was the assurance given by the last government.

The piece continues.



> According to Harry Crosbie the amount the borrower owes will and has  changed and the purpose of Nama is not to maximise the taxpayers’ return  (incidentally, I believe the word “taxpayer” is ideologically loaded  and I use it here just because Brian Lenihan used the word).
> 
> I  phoned Nama and asked to speak to their press office. I was told they  did not have a press office, that their communications were being handed  by Gordon MRM. I got to talk to the managing director and owner of  Gordon MRM, Ray Gordon, who told me: “The priority of Nama is to recover  the amount Nama paid for the loans”.
> 
> He went on to say that Nama  would pursue the full amount in many cases, depending on the level of  co-operation they had received from the borrower but often there was no  point. He said the focus of Nama on recovering the amount Nama paid for  the loans had been stated in the latest annual report and in statements  made recently on behalf of Nama.
> 
> So there you have it.


Taking all three sources together and the lack of any rebuttals (feel free to post them) this reads like a bailout to me.

Happy to stand corrected by someone who knows the score better than has been reported to date.


----------



## thedaras

Purple said:


> Yea, that's right, we were all conned.


Just in case there is any misunderstanding, I didnt write the following;

Home owners unite on Facebook;

"This page is dedicated to all those Irish homeowners who are struggling to pay their mortgage and at risk of losing their home.
Description	
"If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same". 


I copied the above from the facebook page of Home owners unite.


----------



## onq

Purple said:


> Yea, that's right, we were all conned.



We've discussed the concept of professionalism and the  principle of fiduciary duty, which the officers of the banks appear to have disregarded.


----------



## onq

Sunny said:


> Since 2008, about 90% of Directors have been replaced. More will follow in 2012.



Thanks for stating that Sunny.

As of 19th April 2011, it seems that none of the Directors of Banks  involved in the crisis had been replaced, with talk of action in 2012.

http://www.thejournal.ie/bank-boards...23846-Apr2011/

Have there been any updates since?


----------



## Purple

thedaras said:


> Just in case there is any misunderstanding, I didnt write the following;
> 
> Home owners unite on Facebook;
> 
> "This page is dedicated to all those Irish homeowners who are struggling to pay their mortgage and at risk of losing their home.
> Description
> "If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same".
> 
> 
> I copied the above from the facebook page of Home owners unite.



I agree. Apologies if I gave that impression.


----------



## Purple

onq said:


> We've discussed the concept of professionalism and the  principle of fiduciary duty, which the officers of the banks appear to have disregarded.


The banks breach of fiduciary duty (if there was one) was to their shareholders. In theory a fiduciary should not profit from the fiduciary position so I wouldn't get hung up on the concept as a legal definition. I do agree that they were stupid but this isn't miss-selling insurance or a pension, it's a simple transaction (if a big one). It's "will you loan me X euro for this property?" The bank can say yes or no. When they roll in a car loan/personal loan and/or offer more than was asked for then they are crossing the line but that sort of selling isn't what's got us into this mess.

Money was cheap so loads of people bought it and the government didn't do anything to make cheap money less attractive (in fact they did the opposite). I don't see the banks as the bogymen here. They were part of the problem but not the root cause and they didn't engage in wholesale miss-selling or underhand tricks to con people into taking out loans.  People made bad decisions and now they want someone to blame because they are hurting and/or feel stupid.


----------



## onq

Purple said:


> The banks breach of fiduciary duty (if there was one) was to their shareholders.



No, the breach of fiduciary duty appears to have been to their customers to whom the financial service was offered.
Part of this service is a vetting procedure, which was disregarded in many cases, to the subsequent detriment of the customer.

The level of disclaimers offered on Estate Agents headed paper may allow them to escape legal liability for their part in this debacle.
With such a high level of disclaimer, you'd be forgiven for wondering where professionalism - such as it is - ended and sharp practice began.


----------



## productive

Fundamentally, you cannot have a reckless borrower without a reckless lender. 
The state also has a responsibility. All three parties should be held equally responsible and that will very quickly lead to a team effort in finding a workable solution.

The Irish behave like sheep. Posting thousands of comments on web sites is our idea  of protest. I have no doubt that if Bertie, Neary and a few others were dragged from their beds and publicly flogged, our government would have a different attitude to fining a solution.


----------



## Purple

onq said:


> No, the breach of fiduciary duty appears to have been to their customers to whom the financial service was offered.
> Part of this service is a vetting procedure, which was disregarded in many cases, to the subsequent detriment of the customer.
> 
> The level of disclaimers offered on Estate Agents headed paper may allow them to escape legal liability for their part in this debacle.
> With such a high level of disclaimer, you'd be forgiven for wondering where professionalism - such as it is - ended and sharp practice began.


Very hard to prove ONQ, nigh on impossible I'd say.

As for professionalism, well, I take the concept with a pinch of salt. "Professionals" are as susceptible to human frailty and weakness as anyone else. There are as many greedy and unscrupulous doctors, solicitors, accountants and estate agents (and architects ) as there are greedy and unscrupulous plumbers, shop assistants, IT consultants or painters. People are people, no matter what they wear to work.


----------



## Purple

productive said:


> Fundamentally, you cannot have a reckless borrower without a reckless lender.
> The state also has a responsibility. All three parties should be held equally responsible and that will very quickly lead to a team effort in finding a workable solution.
> 
> The Irish behave like sheep. Posting thousands of comments on web sites is our idea  of protest. I have no doubt that if Bertie, Neary and a few others were dragged from their beds and publicly flogged, our government would have a different attitude to fining a solution.



I agree. The bankers should be sacked, the banks should to taken away from their owners 9shareholders) at a fraction of their 2007 value and the government who allowed it to happen should be turfed out... oh wait, most of that's already happened.
So, sack the rest of the bankers and what's left? Find a way to take their pensions from Neary and Bertie? After that what's left... yep, the people who took out the loans need to take responsibility for their own actions.


----------



## onq

Purple said:


> Very hard to prove ONQ, nigh on impossible I'd say.
> 
> As for professionalism, well, I take the concept with a pinch of salt. "Professionals" are as susceptible to human frailty and weakness as anyone else. There are as many greedy and unscrupulous doctors, solicitors, accountants and estate agents (and architects ) as there are greedy and unscrupulous plumbers, shop assistants, IT consultants or painters. People are people, no matter what they wear to work.




I take your point on the bad apples in professions, but the essence of professionalism is that they undertake to keep to a higher duty of care than the man on the top of the 46A Bus.

Bankers get paid way more than many professionals I know and seem to they justify this in part by claiming to be professional.

Another poster posted a section from the Bankers code of conduct recently on AAM and this supports my assertion.

I don't think its hard to prove at all - a review of past lending practice and that which persisted in the Tiger will do.


----------



## onq

productive said:


> Fundamentally, you cannot have a reckless borrower without a reckless lender.



That is the most incisive, pithy comment that has been posted on askaboutmoney in the past two years.


----------



## Sunny

onq said:


> That is the most incisive, pithy comment that has been posted on askaboutmoney in the past two years.



It's not really. A bank could lend money to someone with large savings and who can easily afford the repayments but  then discover that as soon as they get the cheque, they decide to buy new cars, have numerous holidays and spend all their extra cash on going out. And then when things change, they blame the bank for reckless borrowing but at te same time forgetting about their reckless living during the boom years. 

As I mentioned before, an interesting comment in the report was that the coverered banks only account for 50% of the arrears despite having about 66% of the mortgage market. That suggests that their mortgage books are actually not in the worst shape and were no where near banks like Bank of Scotland when it came to underwriting standards on mortgages. Banks did some stupid lending but some people did some stupid borrowing. However, that doesn't mean they should pay for their mistake for the rest of their lives.


----------



## Sunny

onq said:


> Thanks for stating that Sunny.
> 
> As of 19th April 2011, it seems that none of the Directors of Banks involved in the crisis had been replaced, with talk of action in 2012.
> 
> http://www.thejournal.ie/bank-boards...23846-Apr2011/
> 
> Have there been any updates since?


 
Here is a recent presentation from the department of finance. There are plenty stories about it as well.

http://www.finance.gov.ie/viewdoc.asp?DocID=7002

Not sure why they presented it in that format instead of a plain written powerpoint. I guess I am old school!


----------



## Purple

onq said:


> I take your point on the bad apples in professions, but the essence of professionalism is that they undertake to keep to a higher duty of care than the man on the top of the 46A Bus.
> 
> Bankers get paid way more than many professionals I know and seem to they justify this in part by claiming to be professional.



Over the last few years I think we’ve all learned that paying someone more doesn’t make them more honest. 
That seems self evident to me but I must be a bit slow or just not be aware of the moral purification training that professionals go through (is it something like what Mr. Spock went through on Vulcan?).

I think so so-called professionals confuse self-importance with integrity.


----------



## Firefly

Purple said:


> Very hard to prove ONQ, nigh on impossible I'd say.
> 
> As for professionalism, well, I take the concept with a pinch of salt. "Professionals" are as susceptible to human frailty and weakness as anyone else. There are as many greedy and unscrupulous doctors, solicitors, accountants and estate agents (and architects ) as there are greedy and unscrupulous plumbers, shop assistants, IT consultants or painters. People are people, no matter what they wear to work.



I take great offence at you putting IT consultants into the latter group...It is an insult to the latter group


----------



## bryanod

Has anyone mentioned Negative Equity doesn't actually mean anything?

Unless you are selling then it doesn't matter.

It's like complaining your car isn't worth the same once you drive it off the showcourt.


----------



## Firefly

bryanod said:


> Has anyone mentioned Negative Equity doesn't actually mean anything?
> 
> Unless you are selling then it doesn't matter.
> 
> It's like complaining your car isn't worth the same once you drive it off the showcourt.



It's handy to have someone to blame though 

I agree. When house prices were increasing did people go to either the bank or the person they bought the house from and offer to pay them more? Again, this is a case of personalising the gain and socialising the loss.....2 wrongs. Finally, when the economy does recover and house prices do start to rise what happens then? Someone who has half their mortgage written off is going to be up a lot of money at the expense of everyone else.


----------



## thedaras

Brendan might be interested in viewing this;
http://www.irishexaminer.ie/ireland/mortgage-plan-vague-and-lacking-in-urgency-170517.html

I’D RATHER BURN MY HOME THAN RENT IT OFF THE BANKS’
Struggling mortgage holder hits out at report - By Claire O’Sullivan 

CAROLINE LENNON-NALLY has been in mortgage arrears for the past 10 months, and is one of the thousands of distressed mortgage holders Declan Keane refers to in his report into the mortgage debt crisis, which was published yesterday. 

But the idea of becoming a social housing tenant in "her own home", as the report recommends, sends her into a tailspin. 

She said she has already paid about €50,000 in mortgage repayments to her bank, a size-able deposit when she bought her home, as well as stamp duty. 

"I’d rather burn it than rent it back off the banks," she said. "I have put huge amounts of my own money into this house. I worked my whole life for it. Anyway, it’s only worth about €200,000 to them now." 

She paid €385,000 for the property, but her bill came to €412,000 by the time she had paid stamp duty and legal fees. 

Stuck in a 5.5% fixed-rate mortgage, negotiated in 2007 when she bought her home, she found it increasingly difficult to meet her €1,470 mortgage repayments, which were fixed at interest only until 2012. 

Last winter, Caroline realised she could only afford to pay €1,000 per month and told her bank, which said she would have to pay €8,000 to break the agreement. For the past 10 months she has paid €1,000 into an account every month to prove she is willing to pay — but not on their terms. 

Caroline has founded Irish Home Owners United, which will meet legal group New Beginning and the Defend Our Homes alliance later this week. 

- Irish Homeowners Unite can be contacted through Facebook at http://exa.mn/homes. 

Picture: Caroline Lennon-Nally has made mortgage repayments of €50,000 to her bank since she bought it for €385,000 in 2007. She found it increasingly difficult to meet her €1,470 monthly mortgage repayments and offered to pay €1,000 instead. Picture: Robert Redmon
This appeared in the printed version of the Irish Examiner Thursday, October 13, 2011


Read more: http://www.irishexaminer.ie/ireland...-lacking-in-urgency-170517.html#ixzz1aei9c6R1


----------



## truthseeker

thedaras said:


> 'I’D RATHER BURN MY HOME THAN RENT IT OFF THE BANKS’


 
Without commenting on the particular case mentioned, I can see this being the attitude of many people with regards to the new schemes.


----------



## thedaras

Can I ask why you think that would be the case?


----------



## onq

Purple said:


> Over the last few years I think we’ve all learned that paying someone more doesn’t make them more honest.
> That seems self evident to me but I must be a bit slow or just not be aware of the moral purification training that professionals go through (is it something like what Mr. Spock went through on Vulcan?).
> 
> I think so so-called professionals confuse self-importance with integrity.




I totally accept your point that paying people more money doesn't "make" them honest.
I think there is a corollary argument being appointed by a client doesn't mean you will get paid by them.
I have previously argued in relation to bankers particularly, that paying them more money doesn't ensure you get competence.
This goes hand in hand with another argument on another topic by applicable here, that a person's formal qualification doesn't guarantee they will act with integrity.


I think some people have justifiable concerns about people who claim to be professional, which I share BTW.
I've run met people in my profession who failed to impress and I have advised on court actions in which they acted for the other side.
I also accept that there are people (possibly the same people!) who also  seem to charge way over the odds for providing a professional service.

I can only answer for my own office, the remuneration I  receive on my jobs, the standards of the profession of which I am part and  how I apply those standards.
Because I know how the standards *should* be applied, that is why I can say a professional "should" have this higher duty of care, regardless of how much they are paid.
That is why neither the Nuremberg Defense or the "everyone was doing it" defense cannot apply to the bankers - they were providing a professional service and had a duty to discharge.


----------



## Firefly

truthseeker said:


> Without commenting on the particular case mentioned, I can see this being the attitude of many people with regards to the new schemes.



I agree some will. However, for those who bought apartments in bally-go-backwards they must be delighted with the prospect. They get the debt written off and agree to rent the apartment from the bank. 6 months down the road they decide that they would rather rent somewhere else thankyou very much. What happens then? The bank has to write off the whole amount owing to them and the taxpayer again comes to the rescue. Madness.


----------



## onq

thedaras said:


> Stuck in a 5.5% fixed-rate mortgage, negotiated in 2007 when she bought her home, she found it increasingly difficult to meet her €1,470 mortgage repayments, which were fixed at interest only until 2012.




Was she under the impression that she could afford the fixed rate for five years?
What changed since 2007 to make it unsustainable for her to pay this?

One major issue seems to be the fixed rate mortgage.
The other seems to be this figure of €8,000.


----------



## onq

I mean is that I bought my home to live in, not trade up from per se, and I expected to be paying around 10% interest on the mortgage.
I cut my cloth according to my measure and we discounted my wife's income at the time before setting out buying budget.

This homeowner seems to have bought way beyond their means (50% more) to repay even at around 5%.
Do we have any overall estimated figures on this, stress-tested mortgage payment ability?

Because this seems to have nothing to do with negative equity - its ability to pay.


----------



## thedaras

Another article that Brendan and others may be interested in viewing;

[broken link removed]

And this:

http://trueeconomics.blogspot.com/2011/10/13102011-mortgages-report-offensive.html


----------



## Luternau

onq said:


> Was she under the impression that she could afford the fixed rate for five years?
> What changed since 2007 to make it unsustainable for her to pay this?
> 
> One major issue seems to be the fixed rate mortgage.
> The other seems to be this figure of €8,000.



Finally more detail on the professional civil servants case. 

What changed since 2007? Everything.  Austerity-lots of it for everyone. For public servants this meant penion levy, income levy and USC.
As the article last says she got into trouble last winter and is borne out by stating she is in arrears for 10mths.
Was she stress tested-I would say she was and at @ 5% based on her income, which in 2007, or even 2006 when her application could have been made, would have been expected to remain constant or increase (based on historical data of Public Servant pay). If it could be paid in year one-it shoul dbe payable for the five years-the most expensive years of any mortgage. So she was given the money. Then 3 years in everthing changed for her financially.
Not in defense of her stance, but if she is in genuine difficulties, she should be able to restructure her mortgage, just like everyone else. But the bank says there is a redemption on the remaining fixed rate contract to pay first. On the face of it this seems unfair. If she had 8k -would she want to restructure?
However, I wish she would stop this Professional Public Servant talk- Public Servant seems adequate detail. And as for the €50 per week on clothes and grooming, perhaps she should cut this back in line with the cutback in salary and offer the savings to the bank. I doubt she would loose her job over poor grooming!


----------



## onq

€50 in clothes and grooming PER WEEK?!
€2,500 per year on this when she can't pay the mortgage?

I agree that she may have standards to maintain in terms of her deportment and personal appearance.
But I'm beginning to form the opinion that centres more about the extra-over due to the fixed rate, which would gall me too.

Is it possible to determine what this persons likely salary range is, Luternau, to give some better background to the dilemma - is that being too prying?


----------



## DerKaiser

It's quite easy to see how she could be €500 pm down from 2007 with pay cuts, tax hikes, pension levy, etc.

She probably should have allowed herself a buffer when taking out the mortgage, but with a fixed rate and a steady job, she would have been seen as a very safe bet.

No point in dwelling on whose fault it is that her disposable income has taken a hit (arguments will range from casino capitalism overseen inept policticians to benchmarking leaving public servants on unrealistic salaries to unsustainably low taxation rates during the boom to overly generous public service pensions that must now be paid for by incumbants).

Is there a chance of her taking in a lodger under the rent a room scheme to close the gap in repayment ability I wonder?


----------



## truthseeker

thedaras said:


> Can I ask why you think that would be the case?


 
Is it not obvious? In many cases people scrimped and saved for years to get a deposit to buy their own home, missed holidays, social events, in my own case lived on beans and toast many month ends before the next pay cheque came rather than break into savings. Then spent money making the property a home, plus paying the mortgage each month.
To now have to lose all of that and rent the property off the local authority as a social housing tenant must be a bitter pill to swallow. 



Firefly said:


> I agree some will. However, for those who bought apartments in bally-go-backwards they must be delighted with the prospect. They get the debt written off and agree to rent the apartment from the bank. 6 months down the road they decide that they would rather rent somewhere else thankyou very much. What happens then? The bank has to write off the whole amount owing to them and the taxpayer again comes to the rescue. Madness.


 
I was wondering about this myself - do you get to start over with a clean slate or is part of the scheme that you have to rent that particular property?


----------



## Luternau

_*[Original post removed] *

Moderators' note 

I think what needs to be said about Caroline Lennon Nally has been said. If someone has some new information to add on her case,by all means please do add it. But please stop discussing her make-up bill, her civil service salary etc. 

Thanks

Brendan
_


----------



## thedaras

Originally Posted by thedaras  
Can I ask why* you** think* that would be the case?



truthseeker said:


> Is it not obvious?



Why would what YOU think be obvious to me? I cant read your mind!


----------



## Firefly

If the owners of this house can't sell should they be bailed out too?

[broken link removed]

and 

[broken link removed]


----------



## Purple

Gekko said:


> Those who haven't been stung by Ireland's property collapse are coming across as very smug.  In most cases, such people have just been lucky - They were either at the right age or stage of their life during the boom.


Some were lucky, some were wise. Not everyone who is against debt forgiveness is sitting pretty. Some people see it as an ethical issue.


----------



## kennyb3

bryanod said:


> Has anyone mentioned Negative Equity doesn't actually mean anything?
> 
> Unless you are selling then it doesn't matter.
> 
> It's like complaining your car isn't worth the same once you drive it off the showcourt.


 

Cant believe nobody has commented on this - it hought most had finally got their head around this. While technically you are right, i think you've missed a massive point - that being the opportunity cost of your money.

Those that bought in say 2007 with a €1400 mortgage could probably buy with an €800 or €900 mortgage, for example, given a number of avriables. (just an example).

Thats €500-€600 extra p.month to fund a better lifestyle, educate your kids, retire early. Fairly significant i'd say.


----------



## Gekko

kennyb3 said:


> How is it not true? Like you said they wanted to get 'on the property ladder' not buy a home for life. They openly admitted they planned to stay two years then get a house.
> 
> How do you think they thought they'd do that?


 
That's pretty obvious.  What did any young couple think they'd do?

They bought the apartment with the intention of trading up down the line when their circumstances permitted it.  In a functioning economy where house prices rise gradually over time (or in our Celtic Tiger boom), the apartment would have appreciated in the interim but the house that they want would have appreciated even more (so in effect, they'd be worse off - they don't make a killing).

I know lots of couples who are now stuck in apartments that they only saw themselves in for a few years.  None of them bought the apartments to make money - They bought the apartments with the intention of losing money!  In an ideal world, they'd have bought a house in 2005/2006 but they couldn't afford one.  Renting is not at all straightforward in Ireland compared to other jurisdictions.  They therefore bought apartments as interim measures which they're now stuck with.  Something should be done to facilitate these people, e.g. allow negative equity mortgages for those trading up, force lenders to include the rental income in the affordability calculations or make the tax position for such people more favourable.


----------



## Sunny

No offence to anyone here but the only people talking an universal debt forgiveness are people here ranting against debt forgiveness and some lunatic organisations that have been set up around the place. 99.9% of the people I have seen on AAM talk in favour of some sort of debt forgiveness and I use that term loosely are not advocating a free for all scheme for everyone who bought a house during the peak. 

Maybe all the smug people who didn't buy in the peak, haven't lost their jobs, haven't had large pay cuts, and have never made mistakes in life can set up their own thread and can discuss how great they are between themselves.


----------



## Gekko

kennyb3 said:


> And whats wrong with being smug? Were the speculators/buyers not smug at the time - telling us over dinner how their house has gone up €10k since last Friday. Shoe and other foot spring to mind.
> 
> Why should resposible individuals who didnt hop on the so called ladder during the boom because they didnt think they could afford it using proper economic fundamentals such as times salary pay even higher taxes (again) to help out these people.
> 
> Whats worse is there is many who bought in 2005,2006 and 2007 who were warned on here and the Pin and Boards about not doing so yet wouldnt listen/didnt care.


 
Frankly, I don't believe that such people exist.  The country is fool of spoofers right now pontificating about how they didn't get involved in the property frenzy during the early to mid 2000s.  In my view, they are complete spoofers.  They probably already had a suitable home.



DerKaiser said:


> I'd argue that the people most upset are those who have been stung but are coping.
> 
> It would be bad enough to have stayed out of the property frenzy and end up paying for it, but you don't want to end up paying for both your own mistake and the mistakes of others in the same position as you who won't make an honest effort.
> 
> A person could be in a situation where their savings are gone and half their earnings are gone in mortgage repayments. It's a tough situation but you can plough through, not beat yourself up about it and try get on with living life. It's tougher to see others in the same situation moaning about it and looking for a free handout because (a) despite coping it still prevents you from moving on your own mistake and (b) you know the handout they are looking for can only come from your pocket in the form of higher taxes.
> 
> We're all hard pressed. Bailing out 10,000 people with no hope of paying their debts is manageable. Attempting to bailout 200,000 people whose high expectations of life have been hit by falling property prices would destroy us all.


 
I've lost a fortune during this collapse and will receive no bailout from anyone.  I'm just rebuilding myself.  But I acknowledge that others should get help.  That young couple from Clonee should be facilitated and allowed to move to a suitable house.



Purple said:


> Some were lucky, some were wise. Not everyone who is against debt forgiveness is sitting pretty. Some people see it as an ethical issue.


 
"Ethics" are a red herring.

People with investment properties should be left to blow in the wind.

Young couples stuck in apartments should be allowed to trade up and take their negative equity with them.

People who can pay a portion of their mortgage should have the State/bank take an interest in their home.

Hopeless situations with no income should be allwed to send "jingle mail".

We need action today, not the results of more wordy studies with no action for at least a year.


----------



## monagt

Perhaps a poll should be taken in AAB with perhaps 4 options:

1. No DF of any Kind
2. Partial DF based on Debt and Current Price of House and currents state of Household
3. Partial DF based on Debt and Current Price of House
3. Full DF  - a free for all

It would allow people to Vote and not rant on and on

And it would give an indication of where this board stands in relation to MONEY and Social Policy


----------



## kennyb3

Gekko said:


> Frankly, I don't believe that such people exist. The country is fool of spoofers right now pontificating about how they didn't get involved in the property frenzy during the early to mid 2000s. In my view, they are complete spoofers. They probably already had a suitable home.


 
Maybe you should look at other sites, there are many who openly admitted they were selling a family homes because they thought prices had got crazy and were going to rent for a while. I'm not saying the country was full of them but there were plenty.

As was mentioned earlier on this thread another site spawned up as negative comments on the property market werent welcom here. This was being discussed by some in 2004 and 2005 long before phrases like negative equity were even coined. So you can believe what you want.

PS And im sorry to hear of your troubles. I have friends and family who are in a similar position.

This is not personal but a counter arguement should also be made.


----------



## Gekko

Sunny said:


> No offence to anyone here but the only people talking an universal debt forgiveness are people here ranting against debt forgiveness and some lunatic organisations that have been set up around the place


 
Agreed.

No credible people advocate universal debt forgiveness.

Each case must be looked at by an objective agency and a bespoke solution must be formulated for each case.

Take that couple from Clonee.  Their apartment is not fit for purpose and they need to move to a house.  There's no point in them approaching their bank with a common sense proposal to square the above circle.  An objective agency needs to examine the proposition and have the power to compel the bank to act.


----------



## Gekko

kennyb3 said:


> Maybe you should look at other sites, there are many who openly admitted they were selling a family homes because they thought prices had got crazy and were going to rent for a while. I'm not saying the country was full of them but there were plenty.
> 
> As was mentioned earlier on this thread another site spawned up as negative comments on the property market werent welcom here. This was being discussed by some in 2004 and 2005 long before phrases like negative equity were even coined. So you can believe what you want.


 
A few anonymous posters claiming to be short selling hardly constitutes "plenty".

We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard.  Why is it so different with helping distressed property owners?  We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.


----------



## Sunny

Gekko said:


> We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard.  Why is it so different with helping distressed property owners?  We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.



Good point. Giving child benefit, medical card, pension to someone that doesn't need it is more ridiculous to me than helping someone who is honestly struggling to pay their mortgage and yet no one is ranting against that.


----------



## DerKaiser

Gekko said:


> Take that couple from Clonee. Their apartment is not fit for purpose and they need to move to a house. There's no point in them approaching their bank with a common sense proposal to square the above circle. An objective agency needs to examine the proposition and have the power to compel the bank to act.


 

I'm not sure at all on this one.

They definitely shouldn't get a handout as they can afford the mortgage and a reasonable lifestyle.

They are a high risk for additional debt, so in their case I'm not sure trading up is an option.

Are they really badly off where they are?  If they really wanted another kid they would be cramped but there are families in a lot worse conditions.

It's also been said here already that they could rent out their own place and rent a larger place for themselves for a reasonable additional monthly outlay.

Like almost everyone else I'm against debt forgiveness unless it is necessary. 

Of the examples trotted out on the frontline, none were necessary or deserving of debt forgiveness. I despair that these people think they are deserving of having their debts paid for them out of other hard pressed people's money. 

By and large they were looking at less confortable lives than they had planned, but none of them were actually ruined.  I would be appalled if these were the people presenting themselves to an objective agency for handouts when renting out a spare room or renting their own house out whilst renting somewhere larger themselves would solve their problems.


----------



## kennyb3

Gekko said:


> A few anonymous posters claiming to be short selling hardly constitutes "plenty".
> 
> We've no problem with society helping the less well off even though many of them "messed around" while the rest of us studied hard.  Why is it so different with helping distressed property owners?  We're primarily a society and if our fellow citizens need our help then we should give it to them without the pious and smug attitude.



Yeah you can use anonymity to undermine it, but it was called before others had the sense to. personally id call it plenty but we can agree to disagree. 

I see what your trying to get at in your second posts - so what do you do create a class divide based on education? What constitutes a distressed owner? The lady with the 1m mortgage - how are you going to distinguish? 



Sunny said:


> Good point. Giving child benefit, medical card, pension to someone that doesn't need it is more ridiculous to me than helping someone who is honestly struggling to pay their mortgage and yet no one is ranting against that.



This is prob the most incredible post i ve ever read - do you not see the difference between helping the most vulnerable - children and OAP's,feeding them and putting clothes on their back as against helping someone who took a calculated risk and got it wrong?

If its simply the dont need it part your arguing - well everyone will agree with that - that only means it should be means tested - 2 wrongs dont make a ...

Campaign for means testing so

Is your arguement everyone else gets something why cant we?

To be honest i ll bow out now with how rapidly downhill this is going. im seriously scratching my head here


----------



## Sunny

kennyb3 said:


> This is prob the most incredible post i ve ever read - do you not see the difference between helping the most vulnerable - children and OAP's,feeding them and putting clothes on their back as against helping someone who took a calculated risk and got it wrong?
> 
> Do be honest i ll bow out now with how rapidly downhill this is going. we?



Why don't you read my post again before vanishing into a pit of despair? My argument is against universal benefits. Do you know how much we spend giving child benefit, state pensions and medical cards to people who do not need it? 

I have no problem giving money to people who need help but I dont see the difference between someone honestly struggling to pay their mortgage and someone who keeps getting pregnant and expects the state to support them. (and sorry for using that as an example but you get my point).


----------



## kennyb3

Sunny said:


> Why don't you read my post again before vanishing into a pit of despair? My argument is against universal benefits. Do you know how much we spend giving child benefit, state pensions and medical cards to people who do not need it?
> 
> I have no problem giving money to people who need help but I dont see the difference between someone honestly struggling to pay their mortgage and someone who keeps getting pregnant and expects the state to support them. (and sorry for using that as an example but you get my point).



I hadnt finished my post as you ll see, i hit submit by accident, then edited it immediately. Well then campaign against benefits and fraud then. The reason i think this is going downhill is because its a) going off topic and b) more importantly descending into a 'they get it why don't i type thread'


----------



## Sunny

kennyb3 said:


> I hadnt finished my post as you ll see, i hit submit by accident, then edited it immediately. Well then campaign against benefits and fraud then. The reason i think this is going downhill is because its a) going off topic and b) more importantly descending into a 'they get it why don't i type thread'



But I am not the one campaigning against a targeted scheme to help people who are genuinely struggling with their mortgage. You are. I am simply pointing out that the State is paying millions if not billions every year to people in similar schemes with different names to debt forgiveness. 

I am not in anyway in favour of debt forgiveness by the way but we have a problem and we have to deal with it. Allow people to go bankrupt, pay what they can but allow them to start again is the cleanest, simplest and most effective way of dealing with this. That does not mean you should be allowed to rack up debt, declare yourself bankrupt and forget about it.


----------



## ajapale

Please use the report post facility if you think a post or part of a post is off topic. Claiming that posts are off topic are in themselves off topic.

Some OT posts and parts of posts deleted.

Frontline programme on mortgage arrears and negative equity


----------



## onq

Gekko said:


> I saw the programme.
> 
> She wasn't happy at having a bank employee give her grief over spending €50 per week on work related grooming.  The question is not whether €50 a week is excessive.  I think when you analyse it, it's not excessive but it's certainly inflammatory in a discussion such as this.
> 
> I do not think it's appropriate for the bank employee to give the woman grief over that level of spending.



(nods)

Anyone who's ever had to make a presentation to the bank knows how annoying/embarrassing/intrusive it can be.
Let's move on from that distraction, which is all it was.
I also posted -



> The point is that she looks like she cannot pay her mortgage after 2012.
> I'm not smug about it but it puts her current concerns into perspective.



Is this not the very essence of the original post?
That emotive  ,bordering on biased, presentations are masking the underlying issue?

In the case if the lady who claims she cannot pay a €1,400 mortgage this appears as though it has nothing to do with -

- the Irish banking crisis
- the state of the world economy, or
- the several "hits" taken by the public service.

In that case it looks like there was going to be a default on the mortgage as soon as the "interest only" period stopped.
Nothing was going to stop that happening so I say again, we're not getting the whole picture here, either from the article or the programme.


----------



## Brendan Burgess

I think what needs to be said about Caroline Lennon Nally has been said.  If someone has some new information to add on her case,by all means  please do add it. But please stop discussing her make-up bill, her civil  service salary etc. Overall this thread is raising important issues. Please stay on topic. And please calm down a bit. If someone posts something inappropriate, ignore it or  report it. Don't let fly at them.


----------



## Purple

Sunny said:


> I am not in anyway in favour of debt forgiveness by the way but we have a problem and we have to deal with it. Allow people to go bankrupt, pay what they can but allow them to start again is the cleanest, simplest and most effective way of dealing with this. That does not mean you should be allowed to rack up debt, declare yourself bankrupt and forget about it.



I agree. 
BTW I'm also against universal benifits


----------



## Sunny

Brendan is right. It is not fair to pick on one individual without knowing her. AAM is not hello magazine. Post comments on her facebook page if people want.


----------



## 44brendan

Are we looking to light a candle here or just cursing the darkness and prioritise the allocation of blame? I acknowledge that as a banker I approved a number of loans with high LTV and a marginal repayment capacity. Was this due to incompetence, carelessness or greed? I wasn't paid any performance bonuses and nor did I try to push through loans that were below an acceptable standard. While I agree that the Anglo style lending model did cause Banks to revise their credit standards that in itself would not have led to the current mortgage crisis. There are certainly a significant number of examples of people who were advanced mortgages they patently could never afford to pay back but these would not be the primary root behind the current arrears problems. From an examination of the financial circumstances of those who are currently in mortgage difficulties most have significant levels of other debt such as maxed out credit cards and credit Union loans in addition to their mortgage. It is the difficultly of meeting these loan repayments that predominately have ld to mortgage arrears. 
I am in favour of a measured solution that does involve an element of debt write-off/postponement and to a large extent most Banks will not take a major hit on this as losses have already been provided for. However the difficulties around the application of this type of solution is how to measure the criteria for eligibility for this type of solution. If the Banks do indicate debt postponement or write-off availability, then many of those who are currently meeting mortgage repayments (probably including myself) will join the line for relief. This raises a high potential for further arrears and banking difficulties. I am not holding any candle for the Banks on this issue but there is a general fear of contagion on loan arrears which could end in all of us picking up the tab. It's going to be difficult to come up with an appropriate solution that permits people to extricate themselves from these problems but at the same time maintains the risk profile on the balance of the book.


----------



## onq

44Brendan,

How can you say 

_"I approved a number of loans with high LTV and a marginal repayment"_

then

_"... nor did I try to push through loans that were below an acceptable standard"_

then

_"From an examination of the financial circumstances of those who are  currently in mortgage difficulties most have significant levels of other  debt such as maxed out credit cards and credit Union loans in addition  to their mortgage. It is the difficultly of meeting these loan  repayments that predominately have ld to mortgage arrears."_


Where was the checking procedure that would have uncovered these "other debts" and given the lie to applicant's projected ability to pay?

Was it in place but the people concerned deliberately misled the banks?

Was the question of "other debt" simply not addressed, assuming the mortgage would be given primacy?

And in the context of the disaster we are all in, what defines "acceptable standard".


----------



## 44brendan

I have no dispute with the issue that the qualifying criteria for HL facilities was incorrect. yes the Bank's were driven by high sales/profitability rather than appropriate credit standards. Somebody should have shouted stop but demand from shareholders and directors drove senior management into making decisions that I agree were foolhardy. So in that context I acknowledge that the term "acceptable standard" was based on levels of acceptability that were well above what should have been applicable. 
The 2nd point is that a significant amount of personal debt has been built up over the last 3/4 years which would not have been evident at time of loan approval. There was a tendency to push this debt intermittently on to the mortgage. Again foolish lending policy and one that I would never have agreed with. I was very rarely involved in mortgage approvals but I agree that particularly where mortgages were introduced by a broker the level of information provided left a lot to be desired.


----------



## DerKaiser

44brendan said:


> ........to a large extent most Banks will not take a major hit on this as losses have already been provided for.


Your post is informative and I agree with most of your sentiment except for the above.

Michael Noonan first mentioned this point a few months ago and people arguing for debt forgiveness are quick to seize on it.

The sale of loans from the banks to NAMA at discounted rates, the banks writing down loans in their accounts and the state providing for a certain level of losses (a) does not entitle the people who took out the loan to renege on all or part of it and (b) does not mean the taxpayer isn't taking a hit.

As a country we will either be made bankrupt or crippled with enormous taxes and underfunded public services for a generation if we use the entire debt facility made available to us by the EU/IMF. If we have some discipline and keep the banking losses well below the worst case scenarios envisaged we will recover faster.

The myth that debt forgiveness costs us nothing because it's already been paid for needs to be dispelled before the masses latch onto it as some kind of justification for letting someone else (i.e. the taxpayer) foot the bill where debts are perfectly serviceable.


----------



## DerKaiser

44brendan said:


> The 2nd point is that a significant amount of personal debt has been built up over the last 3/4 years which would not have been evident at time of loan approval. There was a tendency to push this debt intermittently on to the mortgage. Again foolish lending policy and one that I would never have agreed with. I was very rarely involved in mortgage approvals but I agree that particularly where mortgages were introduced by a broker the level of information provided left a lot to be desired.



This is a very informative point.  On the face of it many people (other than those made redundant) should not be in trouble as typical mortgages were 92% LTV, subject to some degree of stress test on repayment capacity and, most importantly, people now generally enjoy lower interest rates.

The practice of borrowing the deposit from the credit union and hiding it from the bank (not hard given they weren't looking too hard!) was widespread. I wonder is there a tendency for people to ignore their own role in such practice and in artificially inflating their salary on application forms when allocating blame?


----------



## onq

So let me get this straight Brendan.

You're saying that -

1. The _"acceptable standard"_ was _"well above what should have been applicable"_.

2. These people (who were already effectively maxed out in terms of mortgage borrowing) were also allowed to run up debts and _"to push this debt intermittently on to the mortgage"_.

As you're being so candid I'm not making any comment on this - I'll leave it stand.

I'll ask the following, because I know its one of the qualifying questions that Social Welfare Inspectors are asking.

_"Were these people also allowed take out loans for new cars and transfer these onto the mortgage as well?_"

I'll also ask this.

_"Were these people also allowed carry out significant extensions to their homes and transfer these onto the mortgage as well?_"


----------



## 44brendan

I am not proposing or supporting debt forgiveness. However as in any commercial reality there are a number of borrowers who will never be in a position to meet their full obligation. These loans in most part are provided for and the Bank (in line with any commercial entity) must accept that this money will not be recovered. Writing off the loan is in effect revaluing that asset to a level that is realistic. 
I agree that any extended levels of provision that would be based on a concept of compensation or "debt forgiveness" does create the potential for significant further losses so I think we are broadly in agreement on this.


----------



## 44brendan

ONQ. I'll take your questions as rhetorical. You will be well aware of the number of occasions that this type of top up lending occurred.


----------



## onq

Actually I am only peripherally aware, Brendan not "well aware". 

During the Tiger, we were wondering how we were managing to do so "poorly" in comparison to many others despite being busy and getting paid for work.
So to hear your comments - "from the horses mouth" so to speak- brings it all home to me.

Speculation is one thing, confirmation is another.
I'll take your above reply as further confirmation.



44brendan said:


> I am not proposing or supporting debt forgiveness. However as in any commercial reality there are a number of borrowers who will never be in a position to meet their full obligation. These loans in most part are provided for and the Bank (in line with any commercial entity) must accept that this money will not be recovered.


I think this is the reality of what the banks will do.


> Writing off the loan is in effect revaluing that asset to a level that is realistic.


Surely giving the loan a haircut is "revaluing" it.
I would have thought that writing it off would be termed "debt forgiveness".
Perhaps you meant to post "writing down" as in partially, and not "writing off" as in wholly?


> I agree that any extended levels of provision that would be based on a concept of compensation or "debt forgiveness" does create the potential for significant further losses so I think we are broadly in agreement on this.


Brendan,

I appreciate your candour in making all these comments.

I think the banks are currently in a bad place, one they willingly and foreseeably went into and they are desperately trying to get out.
Any action must be speedy enough to have the required effect in a timely manner and make sufficient dents in the amounts to restore a decent level of disposable income to within the Irish economy.

Without this disposable income, several sectors won't recover soon or well, particular in the retail sector.
Add another difficult budget and 2012 could see Ireland's consumer confidence crushed totally, instead of cautious optimism creeping in.

In this regard I welcome whatever easing measures the banks can bring to this situation for people who are chronically over borrowed.


----------



## 44brendan

I can't disagree with that but how would you envisage the Banks role in avoiding this happening?


----------



## onq

The banks credit flow went from a tsunami in the Tiger to a trickle.

The banks lent to one in ten in 2010 in terms of loan applications made, of all sorts.
This year they approved approximately half the amount of mortgages they approved last year.
These are anecdotal comments, but the first was from my own loan manager and the second was reported in several media outlets.

Going from a Tsunami to a trickle at the same time as a recession hit buckled the economy.
The current credit restrictions are artificially depressing both the construction and mortgage markets IMO.
The banks need to provide credit again, not to Tiger levels or standards but say to to 2002 standards, before the rot set in.

I said as much to Robert Mulhall at the 2010 Photo Journalism Awards in the Cabinteely AIB Branch.
His bank didn't listen, they just took more bailouts, and the economy has suffered.
The Banks need to see themselves as part of the system and proving solutions.

Fantasizing that Banks are all hard-assed private companies is a nonsense.
They are systemic, endemic, dug into the economy like tics.
And they owe it to the electorate to play their part.

Limiting loans, as they seem to be at the moment, to Start Ups is little or no use.
Start Ups are notoriously risky investments even for venture capitalists.
The Banks need to support existing indigenous industries again.

We don't need a Tsunami, but we need the tap turned "on".


----------



## Sunny

DerKaiser said:


> This is a very informative point.  On the face of it many people (other than those made redundant) should not be in trouble as typical mortgages were 92% LTV, subject to some degree of stress test on repayment capacity and, most importantly, people now generally enjoy lower interest rates.
> 
> The practice of borrowing the deposit from the credit union and hiding it from the bank (not hard given they weren't looking too hard!) was widespread. I wonder is there a tendency for people to ignore their own role in such practice and in artificially inflating their salary on application forms when allocating blame?



Here is my situation. I took a mortgage of 85% LTV and paid the other 15% from savings to buy a property. I have no problem paying my mortgage and never will as long as I keep my job. If I lose my job, it is a different story. If that happened, I don't want a bailout, I don't want taxpayers picking up my bill and I would be ashamed at the thought of struggling to pay my mortgage but could easily happen. I don't want/expect/need help but I am not arrogant enough to believe that I will never need it.


----------



## onq

Sunny said:


> If that happened, I don't want a bailout, I don't want taxpayers picking up my bill and I would be ashamed at the thought of struggling to pay my mortgage but could easily happen.



Believe me, if you are ever in that situation - and I would not wish it on my worst enemy - if you're ever faced with no income, no food in the fridge, no means to pay the bills, your opinion will change.

You will take what you can get and thank people for it.

As someone who has paid tax for 20 years in Ireland, I wouldn't begrudge it to you.

My tax has paid for some utter (insert appropriate expletives) to be kept in ministerial luxury who didn't deserve it.

To see it helping a motivated, work-hungry fellow Irishman through a bad patch would make me feel proud, not resentful.

Despite all the monetarist/capitalist comment on this forum, I am a deep believer in social contracts and helping the other guy, whatever his beliefs.


----------



## 44brendan

I agree that the current credit restrictions are to a largent extent choking the cash flow in the economy. banks will currently not approve mortgages due to liquidity problems. I.e. liquidity is all short term from ECB and there is no capacity to lend long against this.
It is currently very difficult to fund commercial entities due to an inability to properly assess their viability and future profitability. previously the risk was mitigated by the taking of security. Given the low property market and reduction in [property values security is no longer reliable in a problem debt scenario. I.e. Borrowing risk has increased and banks are now more aware of potential bad debts. Its a Catch 22 scenario. After the drought comes the Famine.


----------



## onq

Its worse, its a self-fulfilling prophecy scenario and one that the Banks are feeding into.

Unless the Banks pull out of this deflationary spiral this will only get worse.

As the purveyor of liquidity, there is no point the banks looking around and seeing who else is there - its down to them.

Let the government make whatever representations it needs to make to the  ECB lift the  restriction of liquidity to the short term

I'll leave you with the comment I left Robert Mulhall -

_"The Electorate will forgive the Banks the crash as long as they help in the recovery - what they won't forgive is long years of recession after all the bail-outs, because the Banks _STILL_ aren't lending..."_

I hope someone reading this can take this advice and do something about it.


----------



## Sunny

ONQ, I know my attitude will change but it would still kill me to know I was getting supported by the State. I have always always worked for everything just like the vast majority of people now struggling.


----------



## onq

Sunny, pride in your own ability and independent accomplishment comes after.

When you have a wife and child and bills to pay, everything takes second place to their survival.


----------



## Sunny

onq said:


> Sunny, pride in your own ability and independent accomplishment comes after.
> 
> When you have a wife and child and bills to pay, everything takes second place to their survival.



Completely agree. Fortunately most people here have never experienced that.


----------



## DerKaiser

Sunny said:


> I don't want/expect/need help but I am not arrogant enough to believe that I will never need it.



Most of us are in the same boat, we wouldn't take help until it was unavoidable, and some even go beyond that point.

As a rule of thumb, if anyone is left with a disposable income after paying their mortgage of less than what they would get on social welfare, I believe they should qualify for debt forgiveness. 

From what I saw on the frontline, such people would probably be a small subset of those who feel they are entitled to some sort of debt forgiveness.

Others bandy around a figure north of 35% of net income as being an unsustainable mortgage burden. I find this bizzare.

Take a married couple with no kids on €60k who owe 400k @ 5% interest only.  Their interest bill is 40% of net income. They still have €2500pm after the mortgage to live on. This is quite a typical situation, are we really going to set the bar at this level for debt forgiveness? New Beginning say "yes".


----------



## losttheplot

_  Original content deleted


Please see the posts above.  The attitude and personal background of Carolien Lennon-Nally has been fully aired on this thread. There is nothing to be gained by discussing it further. 

Brendan_


----------



## Gekko

Discussing universal debt forgiveness is a waste of time because nobody has to date seriously advocated it.

Debt forgiveness needs to be targetted.  Let's take a few examples...

The lady from The Frontline with the €1,000,000 mortgage on the property that's now worth €500,000.  She had an offer of €500,000 on the property but the bank messed around and wouldn't allow her to proceed.  The nettle has to be grasped in cases such as hers.  The bank has surely already provided for the bad debt element of this loan.  The bank should take the €500,000, write off the other €500,000 and the lady should be compelled to go through a revised bankruptcy process (i.e. not the current ridiculous 12 year regime).

The couple from Clonee and others in similar situations should be allowed to take their negative equity with them to a more suitable property.  This could perhaps be done through NAMA with NAMA properties.  I know couples with babies and secure combined income of €150,000 who are stuck in totally unsuitable apartments.  They're a good proposition for any bank but the banks won't touch them right now which is ridiculous.  A special product should be created for such couples and banks should be compelled to offer it to them to mitigate the social and medical problems of people holding off starting families or having children in tiny apartments.

Perhaps this has been suggested elsewhere, but I'd suggest where developments are incomplete or half full, people should be incentivised to leave certain developments and fill others thus creating more empty developments which could then be bulldozed.


----------



## monagt

http://www.examiner.ie/opinion/columnists/matt-cooper/why-the-government-isnt-interested-in-solving-our-mortgage-debt-crisis-170606.html

Good Article the Urban Myth as Matt Cooper calls it.




> The reality is that NAMA is cutting deals with the developers to allow for only partial repayment of their debts. The banks have been saved with our money. But for all the talk and three reports nobody in power is really interested in solving the issue that outsides like Bill Clinton can see are essential to economic and social recovery.
> 
> Read more: http://www.examiner.ie/opinion/colu...ortgage-debt-crisis-170606.html#ixzz1akGVnaKJ


----------



## bryanod

kennyb3 said:


> Cant believe nobody has commented on this - it hought most had finally got their head around this. While technically you are right, i think you've missed a massive point - that being the opportunity cost of your money.
> 
> Those that bought in say 2007 with a €1400 mortgage could probably buy with an €800 or €900 mortgage, for example, given a number of avriables. (just an example).
> 
> Thats €500-€600 extra p.month to fund a better lifestyle, educate your kids, retire early. Fairly significant i'd say.


 

My 100,000 Ferrari is now only worth 50,000 if I waited I could've had 50k to spend ona  better lifestle, education, retirement!

If people were happy to spend the 1400 a month now, and since only talking about negative equity, are still able to pay it, about what are the complaining.

On the other side, people who can afford to take their negative equity should equally be allowed to move if they can still afford their mortgages. This is the other side of the same coin above, negative equity doesnt actually matter, if you can afford to pay it you should, and if you can trade up/down and carry it, thats fine too.


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## Firefly

Gekko said:


> The couple from Clonee and others in similar situations should be allowed to take their negative equity with them to a more suitable property.  *This could perhaps be done through NAMA with NAMA properties.*
> 
> .....and....
> 
> I'd suggest where developments are incomplete or half full, people should be incentivised to leave certain developments and fill others thus creating more empty developments which could then be bulldozed.



I thought about both of these options yesterday and IMO they should really be considered.


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## Shawady

Bill Clinton talks about the problem of debt, but if we had the recession *without* the drop in house prices, we would still have the same amount of debt.
The only difference negative equity makes is that people that want to sell their house for whatever reason cannot do so.
I've no problem with the government/banks helping people in this situation if possible, but a blanket debt write-off would just open a huge can of worms.


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## DTJAE

Brendan,

I love how you think the banks are being so helpfull in assessing the borrowers situation and helping them out by reducing their repayments for a term but you do know that while they are on the reduced repayments their capital debt is increasing with every passing month making a bad situation even worse? How on earth is this helping? It's kicking the can down the road until eventually 1000's of families are homeless and saddled with unsustainable debt, that is not good for society, mental health, the governement whom will have even higher social welfare bills, the domestice economy - ie. small and medium sized businesses nor will it be good for the banks (that we bailed out for their recklessness) as they will never get anything back nor will they have deposits. Why not see what is in front of us and deal with the obvious problem and introduce debt forgiveness? I understand if you yourself are not one of the people whom was fooled into getting onto hte property ladder but hind sight is great and if we all had it in our fore sight well then i wouldn't be posting this, would i? But we don't and we need to deal with the problem before it escalates out of control like the property bubble did. Have we learned nothing????


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## Brendan Burgess

DTJAE said:


> Brendan,
> 
> you do know that while they are on the reduced repayments their capital debt is increasing with every passing month making a bad situation even worse?



Hi DT

I have written a Key Post which explains the impact of the different types of restructuring which you will find here: 

http://www.askaboutmoney.com/showthread.php?t=159818

In simple terms, if a borrower pays less than the interest being charged, the balance outstanding will rise.


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## onq

Shawady said:


> Bill Clinton talks about the problem of debt, but if we had the recession *without* the drop in house prices, we would still have the same amount of debt.
> The only difference negative equity makes is that people that want to sell their house for whatever reason cannot do so.
> I've no problem with the government/banks helping people in this situation if possible, but a blanket debt write-off would just open a huge can of worms.



Its hard to see that we could have had a serious recession and NO drop in house prices 
Yet once people lost their jobs or experienced income reduction there would have been a crisis.
This would have been partly due to the relatively high mortgages but also credit card debt, car loans, etc.
The drop in house prices makes matters worse because of loans secured on the previous appreciation of house values.
At the developer level, the drop in turnover of their businesses affected their ability to make repayments on loans for land purchases.


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## monagt

People seem to forget that it is the lack of Credit that is fundamental to our problems (No Money, folks) - Banks are even reluctant to lend to each other, check the LIBOR.

http://namawinelake.wordpress.com/2011/10/15/publication-of-the-week/

Sums the Keane report up nicely.


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## onq

_off topic post removed

Brendan_


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## RIAD_BSC

DerKaiser said:


> Your post is informative and I agree with most of your sentiment except for the above.
> 
> Michael Noonan first mentioned this point a few months ago and people arguing for debt forgiveness are quick to seize on it.
> 
> The sale of loans from the banks to NAMA at discounted rates, the banks writing down loans in their accounts and the state providing for a certain level of losses (a) does not entitle the people who took out the loan to renege on all or part of it and (b) does not mean the taxpayer isn't taking a hit.
> 
> As a country we will either be made bankrupt or crippled with enormous taxes and underfunded public services for a generation if we use the entire debt facility made available to us by the EU/IMF. If we have some discipline and keep the banking losses well below the worst case scenarios envisaged we will recover faster.
> 
> The myth that debt forgiveness costs us nothing because it's already been paid for needs to be dispelled before the masses latch onto it as some kind of justification for letting someone else (i.e. the taxpayer) foot the bill where debts are perfectly serviceable.


 
DerKaiser, you're missing the point. Some level of debt forgiveness *has* already been paid for, and if we don't use it, we'll lose it. It has nothing to do with Nama, either.

After the PCAR (the latest bank recaps) in March, the Irish banks received more than €15 billion or so in capital specifically to provide for losses on mortgage and personal debt. That's not an opinion, it is fact. It's there in black and white in the PCAR.

Now, the taxpayer is not getting that money back. It has already been paid over to the banks, borrowed by the state from the troika. 

That €15 billion currently is sitting unused on the banks' balance sheets - unused for the purpose for which it was given. There is no way it can be returned to the taxpayer - that cash now belongs to the banks, to be used for a specific purpose. We need to use it.

If the banks get sold off before that capital gets used, then some foreign bank, some private equity company, or whoever buys the Irish banks off the state, will walk off down the road with that €15 billion in capital in their back pocket. It won't just simply add €15 billion to the purchase price received by the state for the banks. It doesn't work like that. Whatever foreign entity buys the banks will get that €15 billion in capital on the cheap.

In the meantime, consumer spending will remain constrained and consequently unemployment will remain high because of the personal debt levels of Irish citizens.

Someone has to grasp this nettle, for recovery and the economy's sake.

The money has already been provided, despite what DerKaiser says. The country should use it, or we'll lose it to whoever buys the banks.


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## kennyb3

RIAD_BSC said:


> DerKaiser, you're missing the point. Some level of debt forgiveness *has* already been paid for, and if we don't use it, we'll lose it. It has nothing to do with Nama, either.
> 
> After the PCAR (the latest bank recaps) in March, the Irish banks received more than €15 billion or so in capital specifically to provide for losses on mortgage and personal debt. That's not an opinion, it is fact. It's there in black and white in the PCAR.
> 
> Now, the taxpayer is not getting that money back. It has already been paid over to the banks, borrowed by the state from the troika.
> 
> That €15 billion currently is sitting unused on the banks' balance sheets - unused for the purpose for which it was given. There is no way it can be returned to the taxpayer - that cash now belongs to the banks, to be used for a specific purpose. We need to use it.
> 
> If the banks get sold off before that capital gets used, then some foreign bank, some private equity company, or whoever buys the Irish banks off the state, will walk off down the road with that €15 billion in capital in their back pocket. It won't just simply add €15 billion to the purchase price received by the state for the banks. It doesn't work like that. Whatever foreign entity buys the banks will get that €15 billion in capital on the cheap.
> 
> In the meantime, consumer spending will remain constrained and consequently unemployment will remain high because of the personal debt levels of Irish citizens.
> 
> Someone has to grasp this nettle, for recovery and the economy's sake.
> 
> The money has already been provided, despite what DerKaiser says. The country should use it, or we'll lose it to whoever buys the banks.


 
BIGGER PICTURE surely?. Eurozone crisis, global economic meltdown, bank stress tests. Why do you think the banks are hoarding this money?


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## gaius

Brendan Burgess said:


> The public servant was on the News at One today on RTE.
> 
> She is a mother of 1.
> 
> She appears to be Caroline Lennon-Nally a Resource Officer with the HSE. (They also called her Celine)
> 
> She bought her house(in Kilkenny I think?) for €320k in 2007 and has been paying interest only since then ( €50k in interest since 2007)
> 
> She has invested a lot in the house.
> 
> She is involved in something called "Irish Homeowners Unite"


 Well done on tackling her last night Brendan.


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## Bronte

gaius said:


> Well done on tackling her last night Brendan.


 
What programme was that please?  Also is that the lady who was on another programme about a year or two ago?


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## Brendan Burgess

gaius said:


> Well done on tackling her last night Brendan.



Thanks gaius.  This thread was excellent in preparing me for the discussion. 



> What programme was that please?



The Late Debate   starts at around 11 minutes in



> Also is that the lady who was on another programme about a year or two ago?



She was on the Frontline - unchallenged. 
She has been in the Indo - unchallenged
She has been in the Examiner - unchallenged
She was on last night's Six One News - unchallenged
She was on last night's Nine O'Clock News - unchallenged. 

So, I redressed the balance a bit by challenging her. 

Brendan


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## Brendan Burgess

As there is a lot of information on Caroline Lennon Nally in this thread and as she continues to campaign for something, I have moved it into a new thread

Caroline Lennon Nally - Posterwoman for mortgage arrears


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