AIB and KBC to write off all debts in cases of voluntary surrender

Dr.Debt said:

And if you take it a step further, the reason the banks are not agreeing to the type of solution...is that the banks simply don't have the resources (balance sheet strength) to absorb the level of debt write off that is needed to solve the mess in overall terms.

.

Click to expand...

.

I doubt if that is the reason. If a mortgage is in heavy negative equity and heavy arrears, the bank will have already provided for it. Formally writing it off will not make any difference to the provisions they have to make.

I am against banks writing off money which they can collect. I fully support them writing off money which they are never going to collect.

Yes and that's the critical point. You believe that the provisioning at the banks has been done accurately and I absolutely do not believe it. I'll nail my colours to the mast here by saying that the day of reckoning has yet to come and the banks will need to be saved or bailed sooner or later.

To finish up here's one example, I will share with you. I know of one high earner who's property portfolio is seriously under water.(millions) The loans are not in arrears. The bank believes that the debtor will be able to pay back by chugging along on basic living costs for the next twenty five years.
The reality is that the debtor is getting his house in order and will file for bankruptcy after christmas. There's five million alone that doesn't appear on any banks provisions anywhere but will hit the banks bottom line within twelve months. This is not an isolated example.

Steve Thatcher said:

I have to say tho that I am still getting loads of people saying they are being told no write off under any circumstances. So these two situations appear at odds.

Click to expand...

It seems to be dependent on the borrower but my experience with UB is that once you are buy-to-let your options are twofold:

1) Amend and Pretend
2) Go bankrupt

Dr.Debt said:

Yes and that's the critical point. You believe that the provisioning at the banks has been done accurately and I absolutely do not believe it. I'll nail my colours to the mast here by saying that the day of reckoning has yet to come and the banks will need to be saved or bailed sooner or later.

To finish up here's one example, I will share with you. I know of one high earner who's property portfolio is seriously under water.(millions) The loans are not in arrears. The bank believes that the debtor will be able to pay back by chugging along on basic living costs for the next twenty five years.
The reality is that the debtor is getting his house in order and will file for bankruptcy after christmas. There's five million alone that doesn't appear on any banks provisions anywhere but will hit the banks bottom line within twelve months. This is not an isolated example.

Click to expand...

I agree.

With Dr Debt again.

Why would any sane person live in penury for the next 2 decades?
It is not like they killed someone?

Gerry Canning said:

With Dr Debt again.

Why would any sane person live in penury for the next 2 decades?
It is not like they killed someone?

Click to expand...

Indeed. "Chugging along" as described by Dr.Debt is so apt. There are three households I know who are exactly as described, just managing to live, having cut back on everything in order to not fall into arrears. House maintenance, car change, new clothes, children's extra curricular activities, private health insurance, socialising, etc are dreams of the past. Will their bubbles burst when children hit the expensive years ahead? For how many years will they endure this existence before someone can hold their calm no longer.

Negative equity holds for all three households plus no sight of income increase of any appreciable difference, leaves them with no chance of trading up, down or sideways so there are two decades looming in a life of stagnation. Each family has a PPR only.

Are they contributing to the local economy? Mainly to local Lidl/Supervalu. Chemist when children sick(no med.cards) Toys from local huckster shop. Not a red cent to local hotels, restaurants, pubs, cafes, hardware or garden center. That's how life pans out when people are riddled with taxes and charges, income cuts, and mortgages acquired when they were proportionate to income and house value and now being sustained valiantly at great personal expense. None of them killed anyone, as you say, but there is a greater chance of someone or something killing them too soon.

If either of the three could get a write down of some of their negative equity to then pay a lower level sustainable mortgage how better the looming two decades would be.

The first impression after yesterday news was:

Banks need a fresh capital no matter what and they want to use the summer months to let people go out from properties and speak with them. The wording of the articles is very vague, using eye catching words such as: ''legislative framework'' - this means nothing. Can one person here show me an actual copy of an agreement made by one single bank in Ireland showing in writing the terms of the actual Write off.
- none exist.

and I would gladly tell why. because they aren't agreed, just a media show to show that banks aren't that bad.

It's like a post soviet era Lotto lottery in Czechoslovakia - few articles, few tv and radio shows... everyone is speaking of the winner. But there is none.