Ways To Entice a Bank To Accept a Sale on a Property In Negative Equity?

[commonsense]

Commonsense,

The costs are enormous and the costs are being borne by everybody. But not by everybody equally.

How are people strategically defaulting bearing the costs? And by that I mean the future costs?

The OP here and Singmom on another current thread, lost the deposit on their houses and are losing their homes as well.

I have said this before in another thread - they had to pay to live somewhere, this is a cost that cannot be "excluded" in such calculations.

I think that making mortgage payments while the wait to be repossessed is uncalled for. You can be sure that many more cynical people are not doing so.

Again though why should some people have a roof over there head free of charge (to them only)? And why shouldn't cynical people do it - it's apparantly an accepted practice. Maybe some people are going on holidays, maybe some people are paying for private schools for their children?

On the other point as to who pays, I do think that it is just the taxpayer and future taxpayers.

We do not have the money. All of the emotive arguments and who bought what, when and where is not going to change that.

Total govt spending in 2013 excluding interest costs is budgeted at €54.6m in 2003 it was €38.4 m. No one is loosing out through reduced Govt spending.

I'm not sure I get your point here?

 

[cremeegg]

Quote:
Originally Posted by cremeegg
I fully recognise the implication that we will all have to pay for the losses arising from that, well actually its not all, its just taxpayers, but that is another story. I don't see it as some form of revenge on nasty banks, as you rightly point out it is not the banks who will suffer, it is the taxpayer.

Originally Posted by Commonsense
And the depositors, education, health and the vulnerable in society.

My point here is that education, health, and social welfare continue to be funded at Celtic Tiger levels.

The economic crisis has not lead to reduced public spending, the cost is being borne by taxpayers not those dependant on public spending

 

[commonsense]

Quote:
Originally Posted by cremeegg
I fully recognise the implication that we will all have to pay for the losses arising from that, well actually its not all, its just taxpayers, but that is another story. I don't see it as some form of revenge on nasty banks, as you rightly point out it is not the banks who will suffer, it is the taxpayer.

Originally Posted by Commonsense
And the depositors, education, health and the vulnerable in society.

My point here is that education, health, and social welfare continue to be funded at Celtic Tiger levels.

The economic crisis has not lead to reduced public spending, the cost is being borne by taxpayers not those dependant on public spending

I'm not sure I fully get your point, but I will say this, we still have celtic tiger expenditure, agree, but's it's being funded on borrowed money.

 

[cremeegg]

I'm not sure I fully get your point, but I will say this, we still have celtic tiger expenditure, agree, but's it's being funded on borrowed money.

Exactly.

My point is that "education, health and the vulnerable in society" are not losing out, because we are borrowing to pay for these things.

It is the tax payer and future tax payers who will pay

 

[commonsense]

Exactly.

My point is that "education, health and the vulnerable in society" are not losing out, because we are borrowing to pay for these things.

It is the tax payer and future tax payers who will pay

Of course they are losing out. There have been cuts to the disabled, carers etc, education budgets have been cut, SNA'a have been cut. There have been major cuts in health.

If you borrow then you have to repay it. Your figure excluded the "interest payments". Why?

Edit to clarify - if the Government borrows then it has to repay it.

 

[orka]

here is how I lost the run of myself on cheap credit during the boom, without ever stepping inside a bank.

I worked for a private company in the construction industry, not a builder and not on house building.

Many of the projects we worked on were public buildings, financed entirely by the government on the taxes it levied from the construction industry, i.e. borrowed money cheap credit. ...
If it wasn't for the government spending the fruits of the boom, half of the company's staff would not have had jobs in Ireland, and the other half would have been working for a lot lower wages.

The new car I bought in 2006 was entirely financed by cheap credit. I didn't borrow the money I saved up for it, but my wages were financed by cheap credit.

So were every one else's.

It's quite arrogant to assume you know everyone's circumstances - how can you?

Well, here’s how I didn’t (IMHO) lose the run of myself on cheap credit during the boom, without ever stepping inside a bank:
I work in Ireland for a non-EU company. My colleagues are scattered around the world, living wherever they want to live. I could live and work from Outer Mongolia for all my employer would care. The work is 100% unconnected with Ireland and almost entirely unconnected with the EU. I just happen to live here, get paid here and pay my taxes here. The business is a quirky one which has never required loans – cheap or otherwise.

My standard of living has been fairly stable from before the boom, through the boom and now post-boom – although things are definitely a bit tighter now with higher taxes (and having older children now doesn't help either). My most recent (and only current) borrowing was for my family home in the late 1990s. [Slight digression: It’s not that long ago but when we bought our house, all we had were a few bits of hand-me-down furniture and we lived with the hideous 1960s/70s decor for quite a long time until we could afford to do things up a bit – quite a different approach to many of the boom buyers who would get a bit extra because, horrors, who would want to live in anything but a beautifully done up house – and sure, weren’t they worth it?]

I had plenty of credit and investment opportunities during the boom years but didn’t avail of any because the numbers just didn’t stack up. My income (and the equity in my existing house) would have justified a trade-up to a bigger/better house (and sure, wasn’t I worth it?), but I wouldn’t have been able to sleep at night with a big mortgage relative to income even though repayments looked totally manageable. My car is over 10 years old – I’m not a car person so I don’t really care – it’s well maintained and it gets me from A to B.

So, do tell – where did I lose the run of myself on cheap credit during the boom?

 

[cremeegg]

Of course they are losing out. There have been cuts to the disabled, carers etc, education budgets have been cut, SNA'a have been cut. There have been major cuts in health.

If you borrow then you have to repay it. Your figure excluded the "interest payments". Why?

Edit to clarify - if the Government borrows then it has to repay it.

Whatever cuts there have been have not come about because we are spending less, we are not spending less, we are spending more.

The figure excludes interest to illustrate this point. Govt spending with interest included has gone way up, but even when you exclude interest government spending has gone up.

To particularise even more, spending on

Health in 2003 was €9.3bn the revised estimate for 2013 is €14.02bn

Education & Skills 2003 €5.8bn, 2013 revised estimate €8.5bn

 

[cremeegg]

Just to be a complete nerd about it

The dept of Agriculture in 2003 spent €1.23bn and in 2013 spent €1.23bn. No increase there.

The point being that education health and social protection have not suffered. They are still being funded at Celtic Tiger levels.

Here is the link. http://per.gov.ie/expenditure-trends/

There is a further link at the bottom that gives details by dept.

 

[commonsense]

Just to be a complete nerd about it

The dept of Agriculture in 2003 spent €1.23bn and in 2013 spent €1.23bn. No increase there.

The point being that education health and social protection have not suffered. They are still being funded at Celtic Tiger levels.

Here is the link. http://per.gov.ie/expenditure-trends/

There is a further link at the bottom that gives details by dept.

I take your points, they are very valid. But on top of this you are advocating that people default on their mortgages, meaning that the taxpayer pays more, yet you can clearly see the pressure the state is already under to provide services such as health and education.

The only way to bring public spending down is to reduce benefits, reduce social welfare and increase taxes. Is that a fair assessment?

 

[commonsense]

It's quite arrogant to assume you know everyone's circumstances - how can you?

Well, here’s how I didn’t (IMHO) lose the run of myself on cheap credit during the boom, without ever stepping inside a bank:
I work in Ireland for a non-EU company. My colleagues are scattered around the world, living wherever they want to live. I could live and work from Outer Mongolia for all my employer would care. The work is 100% unconnected with Ireland and almost entirely unconnected with the EU. I just happen to live here, get paid here and pay my taxes here. The business is a quirky one which has never required loans – cheap or otherwise.

My standard of living has been fairly stable from before the boom, through the boom and now post-boom – although things are definitely a bit tighter now with higher taxes (and having older children now doesn't help either). My most recent (and only current) borrowing was for my family home in the late 1990s. [Slight digression: It’s not that long ago but when we bought our house, all we had were a few bits of hand-me-down furniture and we lived with the hideous 1960s/70s decor for quite a long time until we could afford to do things up a bit – quite a different approach to many of the boom buyers who would get a bit extra because, horrors, who would want to live in anything but a beautifully done up house – and sure, weren’t they worth it?]

I had plenty of credit and investment opportunities during the boom years but didn’t avail of any because the numbers just didn’t stack up. My income (and the equity in my existing house) would have justified a trade-up to a bigger/better house (and sure, wasn’t I worth it?), but I wouldn’t have been able to sleep at night with a big mortgage relative to income even though repayments looked totally manageable. My car is over 10 years old – I’m not a car person so I don’t really care – it’s well maintained and it gets me from A to B.

So, do tell – where did I lose the run of myself on cheap credit during the boom?

I think cremeegg makes a valid point tbh. While you (or I) may not have availed of cheap credit and incentives to buy property, we did pay lower taxes for example. Children's allowance was significantly increased, dole payments increased, huge incentives to invest in pensions for example.

 

[orka]

I think cremeegg makes a valid point tbh.

Not on this issue he doesn't. Cremeegg's point that I am refuting here is that EVERYONE (not just most/many/some people) lost the run of themselves on cheap credit. I know I didn't.

While you (or I) may not have availed of cheap credit and incentives to buy property, we did pay lower taxes for example. Children's allowance was significantly increased, dole payments increased, huge incentives to invest in pensions for example.

And I agree 100% with this as I mentioned in previous posts - it was hard to avoid the benefits doled out by Bertie - but there is a distinction between passive beneficiaries, active participants and 'those to blame'. Not everyone took part in what cremeegg calls the pyramid scheme, not everyone was happy with what was being done politically and fiscally but majority rules in a democracy, and, once more with feeling, not everyone lost the run of themselves on cheap credit!

 

[commonsense]

Not on this issue he doesn't. Cremeegg's point that I am refuting here is that EVERYONE (not just most/many/some people) lost the run of themselves on cheap credit. I know I didn't.
And I agree 100% with this as I mentioned in previous posts - it was hard to avoid the benefits doled out by Bertie - but there is a distinction between passive beneficiaries, active participants and 'those to blame'. Not everyone took part in what cremeegg calls the pyramid scheme, not everyone was happy with what was being done politically and fiscally but majority rules in a democracy, and, once more with feeling, not everyone lost the run of themselves on cheap credit!

That's not my reading orka. Creemegg says: "We ALL enjoyed the benefits of this, higher social welfare, higher public sector salaries, extra jobs in construction, more money in peoples pockets to spend in private businesses. "


That is my interpretation of "we all took part in the pyramid scheme".

In the 2007 GE, just as the writing was on the wall, Fianna Fail secured 42% of the vote.

There was a 67% turnout for that election. Over 2 million people voted. The electorate wanted to retain the status quo. Crazy house prices, crazy wages, massive social welfare payments.

If we want to have a look at any issues now, then we can't pick and choose what we would prefer to forget.

 

[orka]

That's not my reading orka.

Maybe if you’d let cremeegg reply himself, we would know and not have to speculate. In my opinion, cremeegg is confusing participation, benefit and blame and saying that everyone is ‘to blame’.

This particular discussion-within-a-thread started with my reply to cremeegg’s post 22, some of which you have just quoted

My opinion is that we ALL did take part in it. ...

We ALL enjoyed the benefits of this, higher social welfare, higher public sector salaries, extra jobs in construction, more money in peoples pockets to spend in private businesses. ...We took the loot, we reelected the government that oversaw the whole thing, opposition parties were encouraging MORE public spending not less.

We are ALL to blame

My reply at post 30 disagreeing that EVERYONE was to blame:

You seem to be rolling up participation, benefit and blame into one big mass and saying 'we all took part in IT'. It was difficult to avoid the short-term benefits of eg tax reductions, increases in social welfare etc. - but that doesn't mean that the recipient of the benefit was an active cheerleader for anything - and certainly not everyone shares the blame.

Not everyone lost the run of themselves on cheap credit. Re-elections are not by 100% of voters - there were certainly people opposed to the largesse but they were outvoted by a short-sighted majority - so how can you say EVERYONE is to blame (actually to blame, not just that they benefitted)?

Cremeegg disagreed – saying that we ALL lost the run of ourselves on cheap credit (post 34):

It was cheap credit that propped the whole thing up. Money borrowed by the banks to finance the property industry, taxed by the government to fund public spending. Even if you never stepped inside a bank, we all lost the run of ourselves on cheap credit.

To which I replied (post 37)

Nope. I'm really pretty sure I didn't.(lose the run of myself on cheap credit)

Cremeegg then attempted to educate me about how an everyman such as himself lost the run of himself on cheap credit without ever stepping inside a bank (post 39)

Rather than pointing at other people, here is how I lost the run of myself on cheap credit during the boom, without ever stepping inside a bank.

.
.
... my wages were financed by cheap credit.

So were every one else's.

To which I replied, taking exception to him assuming he knows how everyone’s wages were financed and how everyone lost the run of themselves with cheap credit (we were long past other benefits of the boom at this stage) – post 46:

It's quite arrogant to assume you know everyone's circumstances - how can you?

Well, here’s how I didn’t (IMHO) lose the run of myself on cheap credit during the boom, without ever stepping inside a bank:
...
So, do tell – where did I lose the run of myself on cheap credit during the boom?

At which point you stepped in to say that cremeegg just meant that everybody benefitted. If cremeegg would like to confirm that he meant everybody benefitted but not everybody is to blame and not everybody lost the run of themselves with cheap credit, that would be most excellent as we can all agree and I can desist from mortal combat which is enjoyable but time-consuming...

 

[Luternau]

Going way off topic of OP here-suggest letting off steam is the place for this debate!

My opinion is that we ALL did take part in it. Here are some some arguments to support that opinion.

We ALL enjoyed the benefits of this, higher social welfare, higher public sector salaries, extra jobs in construction, more money in peoples pockets to spend in private businesses.

The huge increases were entirely funded by taxes on the building boom.

We took the loot, we reelected the government that oversaw the whole thing, opposition parties were encouraging MORE public spending not less.

We are ALL to blame

My two cent:
That is total nonsense. Benefiting from some decision taken by others does not mean you are to blame when the whole thing goes bang because of those decisions!

There are loads of examples that many people did not benefit at all. Wages went up, taxes went down, but the cost of living kept rising, even for essential food items. Are the people that bought these items to be blamed for the price inflation?

 

[dodo]

Peter, think you have done all you can to be honest and some person at a desk with a PC just ignores options you give them. Banks have already written down millions of euro so why not this be your write down as I know many bank workers who have told me this and they advise their own friends ,family on how to go about same process you tryng to do.As in they get first option and then expect others not to get same treatment as them. So do what is best for you and dont listen to the moral brigade as they really are starting to sound boring. These things happen in life and people will say tax payers must pay dept, remember you are a tax payer to. So maybe UK your best option, best of luck

 

[cremeegg]

The only way to bring public spending down is to reduce benefits, reduce social welfare and increase taxes. Is that a fair assessment?

That is certainly necessary but we could reduce public sector pay first.

irish academics earn more than twice the European average, hospital consultants earn a MINIMUM of €215k per annum, and so on through the public sector.

It is probably better to reduce the pay of academics earning 3 times the rate of their British counterparts before reducing the dole of those receiving 3 times the rate of their counterparts.

And just to round out the point, if we do not do this voluntarily now it will be forced on us in the years to come, we simply will not have the money.

If we don't act now. Ireland's position in future will be like that of Greece today

 

[cremeegg]

... it was hard to avoid the benefits doled out by Bertie - but there is a distinction between passive beneficiaries, active participants and 'those to blame'....

Is there such a distinction? Certainly it would be comforting to think so, but I think that such a distinction cannot be sustained.

Let me offer an analogy.

Maybe a group of people are together in a supermarket and some members of the group steal from the supermarket. Our hero is part of the group, but not aware of the theft in advance, and certainly does not agree to it.

Afterwards the proceeds of the theft are shared out among the group. Our hero receives some of these proceeds. Lower taxes, child benefit.

Any court would convict our hero of theft just the same as the person who actually planned the theft.

Some of us may not like the fact that we live in the same country as Bertie, but we do.

In a democracy we are all responsible for the decisions and actions or inactions of that society.

And we all continue to be responsible for borrowing €1bn a month to fund our current standard of living. Including me, who regularly tells anyone who will listen that we should stop.

 

[cremeegg]

Benefiting from some decision taken by others does not mean you are to blame when the whole thing goes bang because of those decisions!

In a democracy if those "Others" are elected political leaders then we as members of that democracy are responsible.

If they are civil servants appointed to responsible positions by those politicians, (I am thinking about the financial regulator and the central bank in 2003 to 2007), them we are responsible.

We cannot be members of a democratic society and then disown the decisions produced by that democracy when we don't like them.

Don't get me started on extending that thought to the Catholic church!

 

[Luternau]

In a democracy if those "Others" are elected political leaders then we as members of that democracy are responsible.

If they are civil servants appointed to responsible positions by those politicians, (I am thinking about the financial regulator and the central bank in 2003 to 2007), them we are responsible.

We cannot be members of a democratic society and then disown the decisions produced by that democracy when we don't like them.

Don't get me started on extending that thought to the Catholic church!

Thats a skewed/warped view of things-and in my view, incapable of being proved. However If thats your view view, its your view.

Regarding your supermarket case, perhaps in america they would all go down, but if a group of people go to a supermarket, and one person steals, without the knowledge of the others, no court in this country could convict them for the simple reason that there would be no evidence to convict them. The same holds for your views on liabliity for decisions/ or benefiting from decisions-there is just no evidence to support that view.

 

[commonsense]

Going way off topic of OP here-suggest letting off steam is the place for this debate!

We are, but I do think that there are valid points being raised so there is no reason why they can't be discussed.

My two cent:
That is total nonsense. Benefiting from some decision taken by others does not mean you are to blame when the whole thing goes bang because of those decisions!

I don't think it's nonsense. People in this country were only more than willing to accept all/any benefits that derived directly from the housing bubble.
Higher wages, lower taxes, sellers made stupid money on property, buyers had access to cheap credit, money was pumped into the HSE/education instead of the problems being solved, new roads were built that led nowhere. Child benefit majorly increased to offset ridiculously high childcare costs.

Major tax incentives to decrease the cost of buying investment property, the SSAI,tax incentives to invest in pensions.

There are loads of examples that many people did not benefit at all. Wages went up, taxes went down, but the cost of living kept rising, even for essential food items. Are the people that bought these items to be blamed for the price inflation?

But these weren't "problems" during the bubble because there was money to throw at them.

This perception that "many people" did not benefit is incorrect. You only have to look at the unemployment register to see that. It was around 4% and that is perceived as "as good as it gets", as you will never have zero unemployment for a number of reasons.