What happens if I stop paying my mortgage?

Brendan's post could inadvertently encourage strategic defaulters
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I very much doubt it. Anyone in that position has worked all this out already, not so hard.

I read Brendan's post with great amusement, granted it's a somewhat cynical view, but I'm reasonably certain there are more than a few documented cases which will support many of the points.

In regards to @Fella's post - I would well believe it - Conor Skehan made this very point some time back and was vilified.

https://www.irishtimes.com/news/soc...cy-housing-may-be-gaming-the-system-1.3342289
 

No, I wouldn't find it stressful. I'm an adult.

"loose your home at pretty much anytime"
The point is, you can't. It takes years from the first non payment to actually "loosing your home".
That's the whole point of this thread.
No one in Ireland has missed a payment and then lost their home. The whole system is designed and operated to ensure that people cannot loose their house for years on end.

And think of it another way:
"loose your home at pretty much anytime"
It's not "anytime". After years in the legal process, the judge might eventually hand down a repossession order. However, they always, always put a stay on the execution.
For a family home its typically 6 to 12 months which can be extended if you then make an effort to pay.
Now compare that 6 to 12 month "notice period" with "renting".
Is renting stressful? Once you're lease expires you can "loose your home" however the "stay" (i.e. notice period) is only max 2 months.

Are renters just mentally stronger humans than mortgage borrowers?

This whole thing is way too sentimental.
 
Andy836 said:
No, I wouldn't find it stressful. I'm an adult.
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I think you're still missing the point. It's not the risk that causes the stress, it's the stakes that are involved. Would you find it stressful to play roulette at €1 a go? probably not. Now, would you find it stressful to play Russian roulette, where the stake is you loose your life if you loose? I'm guessing you probably would.

Andy836 said:
The point is, you can't. It takes years from the first non payment to actually "loosing your home".
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Er, the point is: "you can". You're mistaking what commonly happens with what might and sometimes does happen. The fact it takes years simply extends the period where you're subject to that stress: it can happen at any point in that journey, with the odds shortening as time passes.
​
 
Thanks for all the comments. Certainly food for thought.


Brendan Burgess said:
If you owe €100,000 today, you would owe €100,750 after one year. €101,500 after two years.

The lenders don't charge penalty interest on arrears - even on trackers.
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Great post Brendan. I certainly had not been aware of this. It seems to make the whole thing a bit of a one way bet.

I think for my next thread it will be "what happens if I don't pay my rent"
 
cremeegg said:
Great post Brendan. I certainly had not been aware of this. It seems to make the whole thing a bit of a one way bet
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it’s not a one way bet it’s theft , I was in shop with my kid he walked out with a toy he took off the shelf i realised when we were in the car in car park , i brought it back to shops , i could of got away with it but i’m know the difference between right and wrong.
you are stealing if you borrow and refuse to pay money back just because you can get away with it , it doesn’t matter how many others do it , you owe the money you borrowed it in good faith with the intention of paying it back, so pay it back . Somebody else will have to pay if you don’t the money won’t just disappear it makes from the system.
 
I think its a valid question from the OP and a (surprisingly) robust answer from the moderator who is simply laying it out as it is and not advocating defaulting, this is self evident in his subsequent post that he is campaigning against this (which I oppose him doing). However, I see Brendan in a more fairer light than I had suspected for years. Its the immense anxiety of not knowing what or when something will happen that is the real stress maker. People are not stupid, they're just not informed of the processes that dictate their lives.

My two cents.

People seem to be forgetting that the government works for the people, not the other way round, and the banks are supposed to be providing a service but went rogue to the point of almost wreaking the government.

The banks crippled this country, the government know it and the people know it. Keep that as a massive backdrop in your hasty responses. People are suffering. I'm tired hearing "you borrowed the money pay it back" as if it was a level playing field, as if there was an equal amount of credit and debit. Its a ponzi scheme, we all know this now, money is loaned into existence so where to the banks get off add interest!

Its up to the government/judiciary to grant or not grant eviction notices. And why should they be so hasty to work FOR wreak-less lenders who made speculation their business model and brought them to their knees? They held a gun up to the late Brian Lenihans head for the bail-out. Remember the infamous phone-call from Anglo,,,, "give us the moolaah"! The audacity!

I think the Irish government are using this bureaucracy as a two fingers to the banks. In other words, you lent recklessly and now you want us (the government) to throw our own citizens onto the streets only for us to have to re-house them? I don't think so!... They are throwing this hot potato at each other, its a sick game.

There will be obviously people out to take advantage of any system, C'est la vie. This is people reacting completely natural to an unnatural system. My generation were nailed and we're very angry.

Not one person in the financial arena has been held account to what happened. What infuriates me to no end is the constant battering and blaming of the victims. The discussion in the mainstream is only about how are people are dealing with what happened and NOT about what or who caused it, as it rightly should be.

Nothing changes if nothing changes. No lessons were learnt from this, its business as usual.
  • Give a loan with vague details, no insight on mortgage arrears process or calculation methods,
  • force them to take out insurance that benefits the lender...,
  • devalue the property
  • country goes into recession
  • debtor gets into difficulty
  • kick him out
  • filp the property to another sucker and restart the process all over again .......

The OP's query is a reflection of how people are dealing with this, they're trying to educate themselves. You need to find out where all the snares and trip wires have been laid.

Banks want nothing more than you to fall into arrears. I have not gotten any arrears policy or insight as to how they are calculating them nor would they even give me a full mortgage account statement so I could backward calculate how they are doing it. It's insane. I'm glad the Judiciary have this buffer zone bureaucracy and Brendan shared it for genuine sufferers. I've no time for people playing the system whatsoever, on both sides of the fence.

zen
 
zen said:
People are not stupid, they're just not informed of the processes that dictate their lives.
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How do you think people would react if they were told they can't have a loan because they're too poorly educated? They'd have a hissy fit. If you take a loan it's your own responsibility to make sure you are sufficiently educated. In particular you should realise that just because everyone else is doing it does not make it a safe bet. There were stories going around for literally years about how we at least might be in a property bubble. Everyone who bought property did so armed with the knowledge of that risk unless they genuinely were stupid.


This is nonsense that gets posted on conspiracy websites and a bunch of people hear it so often they think its true. The mistake is confusing money with wealth. Money is an accounting mechanism. Wealth does not get loaned into existence. If a builder builds a house he has created wealth through his labour in constructing it from raw materials. The buyer will create wealth in the future by earning money from his own labour. The money lent by the bank is just the accounting mechanism that keeps track of the amount of future labour that the buyer must do to balance the wealth embodied in the house. The money is not a creation of anything in its own right. The interest is what the buyer must pay for the privilege of getting wealth now that he has not yet earned.

zen said:
Its up to the government/judiciary to grant or not grant eviction notices. And why should they be so hasty to work FOR wreak-less lenders who made speculation their business model and brought them to their knees?
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Because the rest of us already paid for the bailouts. The people who are not paying their mortgage are not paying for the bailouts.

zen said:
There will be obviously people out to take advantage of any system, C'est la vie. This is people reacting completely natural to an unnatural system. My generation were nailed and we're very angry.
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You don't speak for an entire generation. I'm one of "your generation". I didn't touch the mad property market with a barge pole because it was so obvious everyone had gone nuts. Then, having done the sensible thing by not purchasing, I ended up paying more than the average person's entire mortgage in extra taxes to bail you all out. I'm bloody angry too -- if you're one of the defaulters you're squatting in my house.

zen said:
Nothing changes if nothing changes. No lessons were learnt from this, its business as usual.
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You're wrong. The lesson that is being learned is that you can have a house without paying for it.

zen said:
I've no time for people playing the system whatsoever, on both sides of the fence.
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Good, well then my rant doesn't apply to you.
 
zen said:
Give a loan with vague details, no insight on mortgage arrears process or calculation methods,
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Expecting a financial institution to fully educate borrowers on these matters is like expecting a car dealer to do likewise on road traffic legislation with their customers.
 
Cremeege, I think it would work very well if you continued to pay something every month, maybe interest only for the first 12 months (after asking the banks etc). Then interest and a bit of capital (but vary it, €50, €100, up or down).

Use the money you were paying the mortgage with to have a better lifestyle, holidays, breaks, invest in your kids education, GAA, soccer, ballet, music, whatever. Give them every opportunity that you might not have been able to if you were using your money to pay the mortgage. Then when they are all through school, college, family holidays, begin to pay full interest and capital again. Esentially you have given yourself a mortgage holiday for 10 years.

Hopefully the courts will protect you from the heavy handed banks, since you always pay something every month, and are trying your best.

You will have invested the money in your family when it was needed and extended the mortgage term, paid a bit more overall but did not have a poor lifestyle by prioritising the mortgage.

Not saying I would do this or cope with the stress if I did but many people sleep easy at night with lots of debt, and in the last 10 years the banks have been constrained from easy repossessions. I am sure many people did become strategic defaulters over the last 10 years.
 
Brendan Burgess said:
Hi cremeegg

If you can pay your mortgage, you should do so.
  • You will own your home mortgage-free earlier
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This is key for me. Unless people get a write-down, thanks to the magic that is compound interest, not paying means making the problem worse down to road. Some may well die without having repaid the loan in full, but there will be nothing left to pass onto their children.....
 
Nobody forced you to take out the loan - it was your choice; you sought, read the statutory warnings and signed for the loan so you should pay it back and if you don't the house should be repossessed as quickly as possible.

"The banks" do not pick up the tab for mortgages in default - society does as the debt gets socialised and factored in to the standard variable mortgage rate paid by those with the personal integrity to do whatever it takes to meet their monthly mortgage repayments.

I strongly agree with Brendan's attempts to get accelerated repossession enacted.

This is a contemptible proposition and epitomises the growing narcissism of society in general.
 
Firefly said:
This is key for me. Unless people get a write-down, thanks to the magic that is compound interest, not paying means making the problem worse down to road.
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With a tracker at 0.75% over ECB, it would be an extremely long road.
 
I just want to pick up on a point that a number of posters seem to have missed, Carnmore encapsulates it here.

Carnmore said:
you should pay it back and if you don't the house should be repossessed as quickly as possible.
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The question was, what would happen, not what should happen.

and here

Carnmore said:
This is a contemptible proposition and epitomises the growing narcissism of society in general.
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It was a question not a proposition. My narcissi were late this year by the way, and are looking very bedraggled at the moment in the rain.
 
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zen said:
The banks crippled this country, the government know it and the people know it.
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Correct. And it was not always 100% the borrowers fault. The Banks were the Mortgage Experts, with decades of experience, and gave advice in their area of expertise. It was their job to know their job. The fact the banks themselves had to be bailed out shows they did not. If and when that advice they gave was incorrect they should pay for it. During the Celtic Tiger, Ireland was known worldwide in banking circles as "the Wild West", because certain bankers here behaved so recklessly.

Should a lender have lent money if they knew the borrower would be unable to pay it back, for example if the loan is 15 times the persons salary? Morally at least, no. As someone else said, how would it be if for example a nurse or doctor gave you incorrect information regarding medication or treatment for say your 6 year old Child or your 80 year old Mother and it caused them serious harm. Would the nurse be to blame or would it be your fault for being stupid in acting on her expert advice?


You could look at it like that, but I think its a bit more complicated. Your point about the audacity of certain bankers is true. Remember the ex managing director of one small bailed out Irish Building Society,who retired with a pension of over 20 million, and he gave 2 fingers to our government? He was said to be the sole person in that little building society who made lending decisions, depending on his humour that day, if the borrower was a journalist or not etc.

zen said:
Not one person in the financial arena has been held account to what happened.
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Very few people in the financial arena have been held to account in Ireland. However, things are changing. In Iceland, a country with a population a fraction the size of Irelands, a few more bankers have been jailed recently, bringing the total there to over 30 I believe. I think people in Ireland are angry about how certain bankers got away with it and rode over the horizon with big bonuses and pensions after wrecking the country.
 
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