Defaulting on mortgage

[Afuera]

Close friend of mine committed suicide because he could not pay his mortgage. This person would never dream of putting the keys back through the letterbox and heading off into the sunset. Would never owe anyone anything or shirk his responsibilities. That's why what happened happened. I wish it were different.

Sorry to hear about your friend MandaC. I think stories like these serve as a perfect example of why Ireland needs to change it's antiquated bankruptcy laws.

The biggest asset the country has is it's young educated workforce and we are about to send them all packing. Crazy stuff!

 

[Chris]

Both Canada and Australia have healthy banks because of tight regulation and a long history of both governments saying No to the banks in the face of strong lobbying by the banks .

Canadian and Australian banks are NOT healthy, they are just not as diseased as the US, UK and Ireland. And the reason for this is that both the Australian and Canadian economies are heavily based on natural resource production which has helped them stay afloat and providing very stable income.
Canada has had to bail out banks, albeit not to the same extent as the US. Australia and NZ have had to guarantee its banks' deposits.
That said, their banks didn't expose themselves to as much risk as was common elsewhere. I would attribute this to shrewd practices on the behalf of their banks and not some "don't take that risk" style regulation set up by some genius regulator.

 

[so-crates]

The high risk lending and greed on behalf of the banks is merely a symptom of the problem. The only reason banks are able to behave in the way they did (without breaking rules, laws or regulations and without going bankrupt) is because of the combination of:
1) the central banking system (lender of last resort will not let you go bankrupt) and
2) the fractional reserve banking system and
3) fiat currencies redeemable for nothing, which are all enforced by governments.
Throwing money at the regulator in order to patch up the symptons with more nonsense 'band-aid' regulations will not solve the underlying problem/disease.

So what exactly do you suggest as a solution? A return to the "gold-standard"?

I went to the bank before I posted the original thread and offered them several options, as a solution to our (i.e. the bank and me) problem.

• I would service the loan as an interest only mortgage, and take my chances that in 10 years time the market would have recovered enough for us all to get out alive.
• I asked them if they would give me a break with the level of interest I'm currently paying. ( I'm locked into 5 1/2 % for the next three years)

They dismissed both suggestions out of hand.

People have said that I need to take responsibility for my actions and they are right ,I have to a certain extent been blinded by my anger.
But so do the banks need to take responsibility for their actions.

How can it be right that I and thousands like me should carry all the responsibility and burden of this problem, when you consider the lunatic, irresponsible behavior of the banks in all of this.

Should I just lie down and accept what the bank says, or should I "grow a pair" as one OP suggested and make some kind of stand.

So basically you took a punt on how the interest rates would go and were peeved that your gamble didn't pay off? And now you want to be let off the hook of your interest rates (to which you knowingly agreed) because you feel hard done by that you didn't come out the winner on your gamble? You want to blame others for the choice you made because the reality isn't palatable to you? It isn't because the interest rates are punitive or unreasonable. It isn't because they forced your hand to agree to those rates. It isn't because you can't afford it. It isn't because you are stressed to make the repayments. 5.5 percent is certainly higher than possible now but it is hardly a high point for interest rates in recent history.

Isn't it about time as an adult of 54 that you stopped throwing hissy fits? There are so many people in genuine distress. There so many people who genuinely cannot afford their debt. There are so many people ashamed that they are not able to meet their obligations. Depression, suicide, poverty and hardship are engulfing people who truly and genuinely are trapped. And here you are, solvent but peeved demanding that you get soft treatment because you want it not because you need it.

 

[Chris]

So what exactly do you suggest as a solution? A return to the "gold-standard"?

Preferably, but pretty much any precious metal will do. The important thing is that paper currency be fully redeemable for its underlying backing at any time. This is the only thing that will keep commercial and central banks at bay.
That, however is just one thing that has to happen. In conjunction with this we have to let the market decide what interest rates should be, based on demand for and supply of credit(not some higher powers at central banks), AND the fractional reserve system has to be replaced by a 100% reserve system where banking is split into deposit banking and loan banking.
If this doesn't happen we will continuously see extreme business cycles of bubble manias and total collapses, all leading to financial crises of some scale. People have to wake up to the fact that monetary inflation always leads to price inflation, and that central banks are basically lying when they say they are there to keep price inflation at bay. If they really wanted to do that they would never increase the money supply, which they do in the good times and the bad times.