Greg Connor:"more than 35% of mortgages arrears are strategic defaults"

Bronte said:
That is not at all clear to me, as my understanding of the 2000 customers with money saved, well it's ear marked for other bills as they become due. And if they paid the mortgage, they might not be able to run a car, buy a car, pay any major bills that are due to be paid.

It would make no sense for someone to have savings AND the ability to pay the mortgage to not pay the mortgage.
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My understanding is that the money is on deposit, not saved. The money is greater than their arrears.

Now personally if you are choosing to set aside money for bills as they fall due, major bills, to run a car or buy a car then you are "choosing" not to pay your mortgage.

That is classic Strategic Defaulting.
 
commonsense said:
My understanding is that the money is on deposit, not saved. The money is greater than their arrears.

Now personally if you are choosing to set aside money for bills as they fall due, major bills, to run a car or buy a car then you are "choosing" not to pay your mortgage.

That is classic Strategic Defaulting.
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Well is it if you require a car for your job?

How about a winter heating bill where there are children in the house?
 
Bronte said:
Except if you're a professional of course.
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That won't wash with the banks. To be honest even if a "professional" was earning a lot of money, if he owed 600k mortgage on a 500k house then the best solution for the bank is to repossess the house, sell it for 500k and looking for the 100k back - as the person can afford it.

The bank get all their money back - no loss.


House resold to someone who can afford it with a higher interest mortgage....
 
commonsense said:
The job that you have an income from as well as more than enough money in the bank to repay your arrears?


Go into arrears with the ESB or Bord Gais.
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What if the bank tell you to pay the arrears and then your old car becomes unusable, how do you get another car.

And what do you do if the ESB decide to cut you off for non payment.

I don't consider these type of people to be stratetic defaulters, they are incapable of paying.
 
Bronte said:
What if the bank tell you to pay the arrears and then your old car becomes unusable, how do you get another car.
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Buy a new one out of the balance left after you pay the arrears.



Bronte said:
And what do you do if the ESB decide to cut you off for non payment.
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You negotiate a repayment scheme with them - including your arrears.

But let's look at this another way. Would you consider it reasonable to have the money for the ESB and Gas and not pay it, rather put it in the bank for something else?

You see there is a consequence with not paying your utility bills - but none (at the moment) for not paying your arrears.


Bronte said:
I don't consider these type of people to be stratetic defaulters, they are incapable of paying.
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You don't know that and are dismissing the fact that while they "may" not be able to repay the actual mortgage payment, they definitively can repay the arrears.

A strategic defaulter is someone who makes the decision to stop making payments on a debt despite having the financial ability to do so.

Now if this person was saving the money or putting it on deposit as opposed to repaying their mortgage and this money "exceeds" the amount of arrears, then this is actual proof that they had the ability to repay the mortgage.
 
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