Defaulting on mortgage

You make some very interesting arguments orionstar21, unfortunately I can't quite address them right now as I am a bit busy. In the interim, just so you don't feel like you have to lie when that putative gun is to your head, swans do indeed come in black.
 

I strongly suggest you report that to the Gardai. I was lucky, I managed to avoid having a gun put to my head. As did eveybody I knew.

Instead, I looked at how much I could afford. Muttered under my breath that houses were to expensive, waited, and bought when I could afford.

Yes, everyone needs to survive. I totally agree with you there, but taking a risk when you are bordering on what you can afford is not a risk worth taking.

At the end of the day, we make our own choices. It's very easy to absolve yourself of any blame when things turn bad.

I'll take a quote from a successful comedy made in the ninties, which rings true when the mass decide it wasn't their fault, when it's easier to blame others than admit that each one of us made choices that were not the best:

"A person is smart. People are dumb, panicky dangerous animals and you know it."
 
Let’s summarise then shall we?

• I was stupid and greedy for wanting to buy a house and put a roof over my family’s head in the first place. I deserve everything that’s coming to me.

• The people gave me the loan, who deliberately conspired to bring about a scenario whereby I ended up paying nearly twice what the property is worth, they should take no hit whatsoever on this deal.

• No! Better yet! Now that their scam has blown up in their faces, the government should come in and wipe their arses and let them off to do the same thing again in the future.

Makes sense to me!!!!!!
 
Don't be harsh on yourself, you were not being stupid and greedy for wanting to put a roof over your families heads.

But getting back to your original post, you are being stupid for stating that now that you have the mortgage and can afford to pay it, why the hell should you?

I can just afford to pay my mortgage, but my thinking more and more is why the hell I should I?
 
He's expressing his views on the fact that the banks didn't give a toss about a)he/she was in their 50s and b)knew quite well that this was THE HIGHEST RISK client.
Complete and utter nonsense; someone in their 50s with stable income, deposit saved, money to furnish the house and the ability to service a 280k mortgage is NOT the highest risk client.


I only partially agree with this. Bankers took on too high risks. But the problem is not that they did it, the problem is that they are not being punished for it. A free-market economy should be based on a profit AND (here is the important part) loss system, where success is rewarded and failure is punished. What we have lived with for decades is a profit system. It's like being offered to gamble on the toss of a coin: heads you win a € tails you break even. In a system like this it is not surprising that bankers tossed the coin too much, but that was what was offered by our banking system.
However, there was no game plan for you to never own an asset; for this to be true you would have to attribute bankers with competences and intellect that are too high and give them the power to coerce you into decisions and force you to take on more debt..
Ultimately, the problem is not bankers but a central banking, fractional reserve system with fiat currency that is not redeemable for anything. So long as there is a 'lender of last resort' we will continue to see financial crises, because there is no incentive to avoid risk.


Again, my point is, yes everyone knew the bubble was false but you have to deal with it. You still need to survive. You still need a home.
Yes, you need shelter, in the form of a home, to survive, but you do NOT need to own a home. Owning a home should be a reward for successfully managing your finances to be able to afford to buy it. The 'afford' part is open to individual interpretations, but if you decide you can afford a house and it turns out that when things go sour, you can't actually afford it, then that is your own doing. And no lack of regulation or rules should be blamed for this, it was your own decision.
 
• I was stupid and greedy for wanting to buy a house and put a roof over my family’s head in the first place. I deserve everything that’s coming to me.
Not stupid, maybe greedy for wanting to OWN, rather than rent. If all you wanted was a roof over your family's head, then the current value of your home should be completely irrelevant to you now and any time in the future.

• The people gave me the loan, who deliberately conspired to bring about a scenario whereby I ended up paying nearly twice what the property is worth, they should take no hit whatsoever on this deal.


There was no grand conspiracy, nobody was ever forced to buy anything. People chose to buy into the hype fed by banks, politicians, media, friends, colleagues, etc!!!

• No! Better yet! Now that their scam has blown up in their faces, the government should come in and wipe their arses and let them off to do the same thing again in the future.
I agree, the banks should be allowed go bankrupt and liquidated. It's the only thing that will discourage this behaviour in the future.
 
Right, I have to post. Can't resist any longer -

OP - get a grip. You bought during the boom, are now in negative equity and are feeling sorry for yourself. If the complete failure of the property market didn't occur you would be sitting pretty on your couple of hundred grand of equity and there would not be a peep out of you. The fact that you have admitted that you are well able to meet your repayments completely emphasises your spoilt brat mentality. Things haven't gone your way so let’s look for a get out clause.

How many people do you think have the same problem as you? I'll tell you my story. I am a single woman in my twenties i.e. - half your age. I have been working in banking since I graduated University (*please don't shoot!*). During the "bubble" I was afforded a 100% mortgage at a very favourable interest rate. I saw this as a very good opportunity to get on the ladder and jumped at the chance. Fast forward 2 years and I am living in, what I affectionately call a "shoe box" with at least €200k negative equity chained around my neck. Of course I knew the price of the property I bought was overinflated, but I took the gamble against my better judgement (and my degree in economics!). The Banks are not totally blameless, but – like everyone else, jumped on this bandwagon and made credit more easily available to cope with the demand. I know it is not as simple as that – there are many other forces involved but further detail would require a whole new thread.

In layman’s terms, hindsight is a wonderful thing and I wish everyone here who had their crystal ball back in 2006/2007 spoke up. My point is, in essence, that not once since the property market collapse and my negative equity has spiralled, have I contemplated this "hand back the keys" sh*t.

I, as an educated adult, signed the letter of offer, without the gun to my head. Now I have to face the consequences. My home is worthless to the bank. So, if I can meet my repayments, that is what I will do. If I start to struggle with repayments for some reason, I will talk to my bank and come to some sort of arrangement.
 
I wish everyone here who had their crystal ball back in 2006/2007 spoke up.

We did. Unfortunately we were not allowed mention it on askaboutmoney.com. Anyone who said the bubble was going to burst got banned.

As a result of this we migrated over to thepropertypin.com. If you go have a look there now you will see we've been shouting about the bubble bursting for years. Everything we have said has come true.
 
Friday November 06 2009
THE report from the OECD (Irish Independent, November 5) is the first true indicator of who is now pulling our budgetary purse strings.
I said a long time ago that the EU was now running this country. You do not bail out a country to the tune of €100bn and not take control.
Everything the OECD said is the same as that being advocated by the Government.
In fact, Charlie McCreevy once said the EU did not understand the Irish economy.
Although I agree with the recommendations in the report, I am fearful they have not addressed the core of the problem.
Successive Fianna Fail governments created a situation whereby workers' wages became nothing more than leverage to borrow money.
The banks and the money they lent became the driving force of our economy. Everything we purchased and the majority of taxes we paid was with borrowed money. Our wages were used to make repayments.
We now have a situation where wages are being driven down but the debt accrued as a multiple of previous earnings is not. You will not get meek acceptance of wage cuts if you do not apply them fairly.

I am sick and tired of the "it was your choice" argument. Read above, we had no choice, never did, we had two directions to go in, NOT CHOICES, pay a property developer huge money to live in their space or take out a huge mortgage for a grossly inflated property. In other words, we really didn't have a choice. My other gripe is not all of us overspent on 4X4s, plasmas, 3 holidays a year, some were modestly living and struggling all through the "celtic tiger" - I'm sick of the envy. It is not this man's fault he ended up with a weight around his neck at 54 years of age. It's a disgrace in fact. Get over the envy and drop the 'choice' argument, have some kindness, respect and consideration. Take it out on the bullies in charge!
 

Of course we had a choice. I chose not to buy an overpriced property because I knew our prices were unsustainable.

As an adult you are free to do whatever you want. No one can force us to do anything.

And I don't understand your envy comment.

Seriously now, if I was able to make a decision to avoid buying, then anyone could.
 

I don't unerstand your post tbh. What do you mean by envy?? What are we meant to have kindness, respect and consderation for? Is this man unemployed with no income or ability to repay his mortgage? No. He admitted himself that he is well able to make repayments. He is just angry because the property has not made him any money. Thousands of people are in the same boat - as am I.

You're contradicting yourself by complaining about those who indulged during the celtic tiger and borrowed money, then defending a man who is having a tantrum about borrowing money for a property during that time in the hope it would earn him a return and the opposite has transpired.
 

We did have a CHOICE which was not to buy at crazy prices ....you could have CHOSEN to rent somewhere modest for a resonable price(yes there was suck a thing in the bubble) which is what sensible people did....utter rubbish Shelley
 
Of course we had a choice, we always have a choice.

Maybe envy refers to buying what we could not afford because we saw what the next person had and felt that was a lifestyle we wnated too even though we couldn't afford it. That was a choice too. And it was the choice of the person who took out the original debt.

Granted hindsight is a wonderful thing, but it's also a powerful lesson.
 
Although I agree with the recommendations in the report, I am fearful they have not addressed the core of the problem.
Successive Fianna Fail governments created a situation whereby workers' wages became nothing more than leverage to borrow money.
The problem is not just an FF government, the problem is that ANY government would have introduced similar interventions instead of leaving the free market alone. I have yet to hear a politician in this country say that government should stay away from any form of economic intervention.

Let me play devil's advocate here: all the banks did was offer what people wanted, loans. The fact that a vast majority of people wanted to own the big house, fancy car, 3 holidays a year, etc, on borrowed money is not the banks' fault. What is the banks' fault is the losses they are now seeing due to too high risks and they should not get a penny for it.
You are painting a picture here as if it wasn't possible to have a basic standard of living in this country without taking out loans and mortgages, which is complete and utter nonsense.



Again, you could have had a very good standard of living in this country without taking on any or too much debt. Here is my story:
In late 2003 I made the CHOICE to buy a house; I CHOSE an 85% mortgage (not 92% as offered by the bank) based on 3 times our combined earnings (not 6 times as offered by the bank); I CHOSE to save hard in order to furnish the house; I CHOSE to drive a 5 year old car (not remortgage the house after 6 months to buy a luxury car as offered by the bank); I CHOSE to reduce the mortgage to 75% based on the original price; in late 2007 I CHOSE to sell the house (because I didn't believe the soft landing BS) by putting it on the market for 15% less than other sellers in the neighbourhood were asking; I then CHOSE to rent and have been doing since; I also CHOSE to have one credit card and pay the bill every month when CC debts were skyrocketing;
Every step of the way I had a choice, I could have taken the choices offered, and often encouraged, by the banks, and also recommended by friends and colleagues, but here is the point: I didn't because nobody anywhere forced me to. Along the way I had people laugh at me for the choices I made. As the saying goes, 'it's not until the tide goes out that you know who's not wearing shorts'; I'm one of the few with the shorts because of the choices I made.
 

I agree with this - the Bank's responded to demand. At times perhaps policy and regulation took a back seat to this. However, during that time, wages were increasing along with people's purchasing and buying power. The influx of foreign nationals further added to this demand. The country as a whole got more confident and wrapped up in our economic prosperity and yes, greed did play a part. Many threw away the notion that property is a long term investment with peaks and troughs and were buying with the view that in the short term they could make a quick buck. I am not saying the Banks are blameless, but if they had reacted the opposite direction - i.e. tightened credit policy and virtually closed for business as they have done of late, people would've complained about that.
 
I am not saying the Banks are blameless, but if they had reacted the opposite direction - i.e. tightened credit policy and virtually closed for business as they have done of late, people would've complained about that.

This is an excellent point. Banks are currently under fire for having tightened their lending rules and lending less, while this tightening is exactly what politicians are saying should have been regulated more strictly in the past years. Either you want strict lending policies or you want easy credit to fuel a consumption based economy, you can't have both.
 
I know a Irish guy who is married to a french lady,He bought investment house in 2006 with 100% mortgage of 360K house now 230K .He had already paid of his own house a few years back.
He bought a new house in France mid of 2008 after selling his own family home and posted back the key's of the investment house to the lender,he left no forwarding address and has no plan's to move to back to Ireland.The house in France is in his children's name.
Also worked with a Romanian guy who had a loan to build house back in his native land,lost job here and says he will never pay back loan.
These people never seem to have an issue after.
Know of a English guy who moved to Ireland in early 90,s after housing collapse in England.He was the first guy to mention jingle mail to me.Again never any follow up 15 or so years later. Banks allow for a certain amount of loss maybe have some sort of insurance.
If you feel that things are getting you down and maybe as some people do think of suicide due to your financial problems.Then maybe best thing to do is start all over again somewhere new and learn from your mistakes.
Suicides are up something like 40 % this year and this is due to the downturn in the Country. So before people start having a go at people who feel hard done by think about what some people are doing to escape.
I prefer to to think that these people had escaped to a foreign Country rather than took their own lives .
I know these people took out the loans and now know it was a mistake .
Of course people are there to pick up the tab but that will sort itself out in time.There are already some of those people who got us into this mess have flown the nest and set up new lives in Switzerland for eg.And these people just get on with it so why can't the normal guy do the same thing.
 


Great post . Indeed their was criminal behaviour in the banks and as a result we are in for the long haul of bailing out banks .
 

Thats what I did . Although I did not put the keys in the post I just emigrated . I have a new passport and I am untraceable . Let the bank put my property into NAMA .