# Mortgage write offs



## Sunny (30 Aug 2011)

Ok, I am putting this in LOS because I am about to rant. I avoided discussing the topic in other threads because there is so much rubbish been written. However, I draw the line when politicians come out in the media with comments that prove they are nothing more than vote chasing morans.

 Our minister of finance comes out and says that the banks were given capital to deal with mortgage writedowns. Sorry minister but there are thousands of mortgage holders with banks like Ulster Bank, Bank of Scotland and various other lenders including sub-prime who have not received one cent from the Irish taxpayer. What are they supposed to do?

Peter Matthews comes out saying banks need to deal with mortgage holders on a case by case basis. What does he think is happening? We have some idiot writing into the Irish Times about how they allow their child eat cereal boxes rather than pick up the phone and talk to the bank and people rush to blame the banks. 

The whole idea of mortgage debt needs to be looked at but I am sick and tired of publicity hungry politicians, economists and commentators pretending there is some simple answer.


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## Purple (30 Aug 2011)

I'm with you 100% on that one Sunny.


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## micmclo (30 Aug 2011)

Michael Noonan, same politican who wanted to use taxpayers money to compensate Eircom investors when the share price fell

He seems to have a track record for these plans and buying votes


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## thedaras (30 Aug 2011)

Did anyone hear the woman on Joe Duffy today talking about the type of loans that some people were given in the 80s?

The basic jist was that your repayments were based on your income.
Could this be a solution?

Say for example there was a family who had a large mortgage,and they become unemployed,their repayments reduce or/and term increases accordingly,and if their income goes up so too does their repayments and the term of the loan.

Could that then mean that those who are in dire straits ,get to stay in their home,but still have the responsibility of the mortgage,and wont have to hand the keys back/have their debt forgiven/claim rent allowance..

Could this also have a positive effect on "moral hazzard" issue ,ie;they are not walking away from the debt,also it would mean that they have no excuse to sell their house..

Here is a link to Mac Domhnaill’s letter from the Irish times;
[broken link removed]

"In 2003, the family bought a house in Tralee for €130,000. There is still a mortgage of €80,000 on it, and monthly repayments are €780. Mac Domhnaill receives €188 a week from social welfare, and a monthly children’s allowance of €280. Their total income per month is €1,032. Out of this,*they have deliberately chosen to continue to pay their monthly mortgage in full. He speaks of a deep and relentless fear in falling behind on those payments.*

“Every bit of my dole goes straight into the mortgage. *I don’t want to go near the bank about renegotiating the mortgage,”* Mac Domhnaill stresses".


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## The_Banker (31 Aug 2011)

Sunny said:


> Ok, I am putting this in LOS because I am about to rant. I avoided discussing the topic in other threads because there is so much rubbish been written. However, I draw the line when politicians come out in the media with comments that prove they are nothing more than vote chasing morans.
> 
> Our minister of finance comes out and says that the banks were given capital to deal with mortgage writedowns. Sorry minister but there are thousands of mortgage holders with banks like Ulster Bank, Bank of Scotland and various other lenders including sub-prime who have not received one cent from the Irish taxpayer. What are they supposed to do?
> 
> ...


 
I agree with the general trust of your argument that politicians are using the mortgage debt crisis to garner votes. But to describe someone who wrote a letter to the IT outlining the plight of his family as an “idiot” is simply wrong.
Not everyone is versed in the ways of the financial world like some of the posters here and people generally get pretty intimidated when dealing with banks and therefore will repay loans to the detriment of all else in family life. Calling him an idiot is the condescending attitude I tried to highlight in another thread and it is wrong. Exaggerating his plight by saying his children “ate cereal boxes” when he said no such thing reflects more on you than it does on him. 
Hold your rage for those who got us into this mess, not those who are suffering from it.


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## Sunny (31 Aug 2011)

The_Banker said:


> I agree with the general trust of your argument that politicians are using the mortgage debt crisis to garner votes. But to describe someone who wrote a letter to the IT outlining the plight of his family as an “idiot” is simply wrong.
> Not everyone is versed in the ways of the financial world like some of the posters here and people generally get pretty intimidated when dealing with banks and therefore will repay loans to the detriment of all else in family life. Calling him an idiot is the condescending attitude I tried to highlight in another thread and it is wrong. Exaggerating his plight by saying his children “ate cereal boxes” when he said no such thing reflects more on you than it does on him.


 
He actually did say that his child ate part of a cereal box because she was hungry in an interview the next day. You don't have to be versed in the ways of the financial world to know that putting the payment of a bill over the welfare of your children is stupid. To not examine what help you are entitled to from the State is stupid. To not contact the bank and see what they can do is stupid. To not contact charities and helplines is stupid. And yet he still has the ability and courage to write a letter to a National Newspaper and appear in other national media? Give me a break. Maybe he is not an idiot but he certainly isn't an example of someone that should be pitied. He hasn't even begun to try and deal with this difficulties.


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## thedaras (31 Aug 2011)

Plus one ,Sunny.


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## Latrade (31 Aug 2011)

+ 1 Sunny. 

But let's face it, ignoring the problem is largely what got us into the mess in the first place. 

I am intrigued that the media is so vocal on the whole debt forgiveness issue. The same media that is who were so vocal on buying into the property Market during the boom.


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## Shawady (31 Aug 2011)

I think that is part of the problem Latrade. 
I suspect there are many people that are in massive negative equity but can afford their repayments, but feel duped by the media/government that property prices would always go up. So even though they can afford their mortgage it probably kills them to have a 400k mortgage on a house worth less than 200K.


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## Chris (31 Aug 2011)

I agree with you Sunny, it doesn't take a lot of financial comprehension to walk into the bank and tell them that you simply do not have the money. This person is well enough versed to explain the problem in a letter and on radio, but he cannot write the same letter to the bank?!?
Putting a bill ahead of the family's basic needs is so irresponsible that I agree in this action being termed stupid. It is far beyond time that people take responsibility for their actions and situations, and tackle them proactively. Writing a letter to a newspaper is not how you solve such problems.


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## thedaras (31 Aug 2011)

I have to agree, as it would appear a bit stupid to not want to go near the bank,which I presume is a pride issue,yet write to a newspaper and have your name and your family made known in the public domain..

However, we should proceed with caution, perhaps if we were in the same position ,who knows what we would do,stress can make us do stupid things,it is very difficult to imagine how people react when things are going awol..

And perhaps the man felt at rock bottom and felt it was the best way forward.


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## micmclo (1 Sep 2011)

Joe Duffy show ran with this for the last two days

And the main call was mortgages for people in negative equity should be revalued and the house owners pay the current value

But if this was five years ago would these callers be calling for increases where the value went up one hundred thousand???
Seems people want a one way bet 

I'm not unsympathetic but I can't call my landlord and say I want a two year moratorium, interest only period and rent arrears written off.
If I don't pay I face eviction


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## Bronte (1 Sep 2011)

When I heard the story from Kerry I didn't think the man was stupid, I thought that's a clear case of neglect of parental duties to one's children. I've read the story and it certainly says the child ate part of a cereal box, the inference being the child was starving in a situation where the parents had the money to buy food but instead chose to repay a mortgage. 

The story does not ring true in other respects, a married man with a dependant wife and kids does not receive only 188 Euro a week?   Unless there is something else that reduces it to that amount. That would be another asset or savings. 

Why are the newspapers not asking pertinent questions in this and other cases, or checking all the facts. Which leads me to the Joe Duffy show yesterday. There were certainly some very sad stories, but the story of the dad living with his mother stuggling to repay his mortgage negative equity debt, why didn't Joe ask him why wasn't the mother of the child also contributing to the mortgage. Also if he rented his own place this rent would be deducted/allowed as a living expense should the bank take him to court for an instalment order. 

The distinct impression I am getting is that people want out of their debt, not because they cannot afford it but because they cannot stomach the fact they went mad, purchased something unsuitable at too high a price with too long a term and the cold reality now of living and dealing with it when it came so easy is that they want the government to now wave a magic wand and make it all go away so that they never learn or admit their own errors.

There are very genuine cases of hardship out there. Those that are not genuine though are making loud noises and tarnishing those in genuine hardship and shame on them for doing so. 

I'm very glad the banks are doing deals, letting some sell, writing off the negative equity. The banks are talking and being helpful to people in distress and there is a code of conduct in place that seems to be working. The level of repossessions is very low, another good thing.


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## MrEBear (1 Sep 2011)

I don't want to turn this into a tread about negative equity (we have enough of them already) but this whole hula baloo that people are making about being in negative equity is starting to grind my last nerve. Like all things in the world, a house is only worth what someone is willing to pay for it. So just because you are told your 400k house is now only worth 200k doesn't mean it always will. The market may rise again and someone may be willing to pay 400k for it, but the main thing is, if you have bought this house to live in and have no plans to move in the foreseeible future then what does it matter what your house is worth. If you can afford to pay your mortgage then do so and stop worrying about it's value. 

Rant over. Bear


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## onq (1 Sep 2011)

+ 1 MrEBear,

It goes back to Eddie Hobbs comment that unless you're going to sell your house and live in a tent the price of your house is irrelevant - the question is "can you afford your mortgage".

As for Sunny's original comment, there are good points to having of all this debate.

Too many people have assumed varying levels of consensus about what was going o nin Ireland economically, there was little discussion and the "sure it'll be grand" mode of regulation was in operation.

Underneath all the waffle and uninformed discussion, things are now getting looked at and talked about at senior levels in many administrations and this can only be a good thing, even if all it does is make our politicians actually do something to earn their crut for two or three  years until we get through this.

Less discussion and "leave it to them" is what got us into this mess. Talking naturally brings out extreme viewpoints, but that's part of democracy. Its a messy process.

We have already seen some fruits of the discussion and raising the awareness of the issues, as Bronte's post above points out.

Once its underway you can form a better opinion of the level of competence of the contributors and their agendas, whether socialist, monetarist etc., and you are thus far better informed than you would otherwise be in most cases.

The mechanisms of the spin doctors are exposed to public view and things get aired. We actually USE our right to free speech. Yes, silly things get said, but overall there is a better informed and expressed electorate, which I believe can only be a good thing.

Unfortunately each generation needs its crisis to bring public debate to this level and its sometimes hard to tell if the tide of knowledge is coming in or out, or if its only waves on a lake lapping the shore, with no real change in level overall.

Hopefully someone will say something SO STUPID that it will prompt some REAL THINKING by someone who can do so and we might move the whole thing forward.

We have already seen some benefits of their being such a widespread awareness of the issues, however extremely expressed as Bronte's post above points out.


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## DerKaiser (2 Sep 2011)

Bronte said:


> When I heard the story from Kerry I didn't think the man was stupid, I thought that's a clear case of neglect of parental duties to one's children. I've read the story and it certainly says the child ate part of a cereal box, the inference being the child was starving in a situation where the parents had the money to buy food but instead chose to repay a mortgage.
> 
> The story does not ring true in other respects, a married man with a dependant wife and kids does not receive only 188 Euro a week?   Unless there is something else that reduces it to that amount. That would be another asset or savings



A few points

1) It's child neglect alright.
2) You talk to the banks, go to SVP, look into mortgage interest supplement
3) The Joe Duffy show demonstrated that it has no interest in helping people if its discussions were not about how the guy should look into the points above


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