Why are those who borrowed 100% LTV complaining?

[Robin Banks]

my statement was more directed towards the people that are complaining that they got the 100% mortgages. They had a part to play and the banks had a part to play in it. Therefore, within their own individual circumstances, everyone was to blame.

Or, to translate your tortured BertieSpeak, everyone was not to blame.

 

[PaddyW]

BertieSpeak? What are you on about? Never been a fan of Bertie. Just trying to let them know, that I didn't mean everyone in the entire country, just those who were complaining about being given 100% mortgages. Themselves and those involved their mortgages were the ones to blame.

 

[buddysmiley]

to be fair (and having worked in property for 15 years in Ireland), I think a lot of people feared that if they did not buy then they would never get a foot on the property ladder and to a large extent these fear tactics were essentially fuelled by developers and the government in close cahoots with the banks. Whilst I don't agree with the excessive spending habits of some people during the boom, there are a huge number of first time buyers living in small starter homes that will never be able to get out of the negative equity trap due to the outrageous overvaluing of property at the peak. I think its all too easy to accuse them of overborrowing when those not in the same situation sit in their own ivory tower handing down judgement. I bought a house in 2004 for 224K my neighbour bought the very same house in 2006 for 370K, do I delight in her misfortune? No. I think a lot of people did what they had to do at the period in time and maybe those more fortunate should just back off.

I think this is a very fair post, as you said there are people here passing judgments and using fancy economic terms. Every one fed into this false conscious world and they bought into it because it was the thing to do in this moment in time in society. Some people were lucky and other's were not, i wonder the individuals who are passing opinion. I really wonder how they would feel if they were in the same predicament. 200 k in negative equity. P

 

[staunton]

Some people did buy within their means.
One person I know was sensible ( relatively)about what she could spend and that got her a one bedroom grannyflat in the back of beyonds for c.250K that she has very little chance of selling now.
Her friends spent big (c.370K) and are also in negative equity but at least are in their family home now.
While the sensible one kicks her heels living where tbh she never wanted to live but couldnt afford anywhere else.

No matter how sensible you were everyone had to pay market price at the time and the bubble lasted so long many people had never seen a dip/recession in their working lives.
We all had heard words of warning but they had been wrong every year for so many years and most thirtysomethings only knew of price rises.
People at that age could only wait so long before they had to bite the bullet and get a home while the banks would still give them the money.
This meant that a lot of the sensible people who waited, saved and watched their friends homes increase ridiculously in value got badly stung when they felt they had no choice but to follow suit.

Bad advice from perceived experts didnt help ranging from Govt to Banks and the high brow newspapers all those highly educated people who turned out to be clueless.
Who were people to trust.

I don't think you can fully blame Joe Soap for doing what everyone with a national voice was advising them to do.

 

[W200]

The term “The property ladder “is one of those awful new fangled flashy expressions which came into being about ten years ago. Before that people simply “bought a house ". With "The property ladder" came the idea supported by lending institutions , auctioneers and other vested interests that you buy today , sell one or two years later when your " property" has doubled in value and "trade up” until within a few years you own that big house on the hill having made a fortune in the process.
We have witnessed the folly of this greed driven philosophy and yet all those same vested interests including government are talking up prices and predicting the bottom of the market in an attempt to re start the whole sorry merry go round.
Until we grow up and see a house as a place to live and not a "cash cow, investment or property" then we are simply waiting to repeat the mistakes of the past

 

[Chris]

People at that age could only wait so long before they had to bite the bullet and get a home while the banks would still give them the money.

No, that's the point they did NOT have to bite the bullet. What they should have done is wait until they could afford something that they were planning on staying in longer term, or that would have been somewhat suitable for any family planning they had.

This meant that a lot of the sensible people who waited, saved and watched their friends homes increase ridiculously in value got badly stung when they felt they had no choice but to follow suit.

And if those sensible people had waited longer, they would have watched their friends homes decrease in value. Nobody was faced with just one choice, there was always the option of not buying!!!! You would now be much better off.

I don't think you can fully blame Joe Soap for doing what everyone with a national voice was advising them to do.

Of course Joe Soap is fully to blame for his decisions, if he decided to jump on the property train because everyone else was doing it. You cannot excuse bad decisions by saying that everyone else was doing it too.

The term “The property ladder “is one of those awful new fangled flashy expressions which came into being about ten years ago. Before that people simply “bought a house ". With "The property ladder" came the idea supported by lending institutions , auctioneers and other vested interests that you buy today , sell one or two years later when your " property" has doubled in value and "trade up” until within a few years you own that big house on the hill having made a fortune in the process.
We have witnessed the folly of this greed driven philosophy and yet all those same vested interests including government are talking up prices and predicting the bottom of the market in an attempt to re start the whole sorry merry go round.
Until we grow up and see a house as a place to live and not a "cash cow, investment or property" then we are simply waiting to repeat the mistakes of the past

Very well said!!!

 

[Pat Bateman]

The attitude of certain contributors to the thread is despicable. We have a culture of home ownership in this country. People had a choice - Buy a home at a certain point in time or continue to see that home becoming less and less affordable as the years (or even months) passed by. The 'holier than thou' sycophants should be ashamed of themselves. Those who claim they knew what was coming are liars. They didn't. Families are now living in poverty. Parents can't afford to pay the mortgage on a home that's worth half the amount of the outstanding mortgage. The State and society as a whole have a duty to assist. As for the 'holier than thou' merchants, they should be made contribute more for their antisocial outlook on life. "I didn't borrow recklessly". Bulls..t. You just got lucky in that you bought at the right time/inherited money/haven't lost your job etc.

 

[canicemcavoy]

The attitude of certain contributors to the thread is despicable. We have a culture of home ownership in this country. People had a choice - Buy a home at a certain point in time or continue to see that home becoming less and less affordable as the years (or even months) passed by. The 'holier than thou' sycophants should be ashamed of themselves. Those who claim they knew what was coming are liars.

It was perfectly obvious to anyone who had either half a brain or wasn't a vested interest than when average house prices are many multiples of the average salaries and we have building societies with TV ads guilt-tripping parents into funding their children's house, that we're in a property bubble. If you want to follow what you think is the national "culture", then fine.

We also have a culture of drinking heavily; does this mean when alcoholics lose their homes, I should bail them out too?

 

[Chris]

The attitude of certain contributors to the thread is despicable. We have a culture of home ownership in this country. People had a choice - Buy a home at a certain point in time or continue to see that home becoming less and less affordable as the years (or even months) passed by. The 'holier than thou' sycophants should be ashamed of themselves. Those who claim they knew what was coming are liars. They didn't. Families are now living in poverty. Parents can't afford to pay the mortgage on a home that's worth half the amount of the outstanding mortgage. The State and society as a whole have a duty to assist. As for the 'holier than thou' merchants, they should be made contribute more for their antisocial outlook on life. "I didn't borrow recklessly". Bulls..t. You just got lucky in that you bought at the right time/inherited money/haven't lost your job etc.

Are you serious!?!?! I cannot believe how many people excuse the bad decisions of people by saying it was what everyone was doing! As I said before, if those same people that bought because they saw a house becoming less affordable, had sat back and said, I realistically cannot afford this, they would now be seeing houses becoming ever MORE affordable.

How is someone who said back in 2005/6 that there was going to be a huge bust in property a liar? They were absolutely correct! I agree that there are probably quite a few people now that claim they saw it coming, but never said anything. However there were plenty that said so publicly.

I didn't anticipate prices dropping this much in 2008, but I still sold my house by undercutting every other house for sale in the estate. There was absolutely nothing lucky about this decision, and for you to say so, insults my intelligence.

It was perfectly obvious to anyone who had either half a brain or wasn't a vested interest than when average house prices are many multiples of the average salaries and we have building societies with TV ads guilt-tripping parents into funding their children's house, that we're in a property bubble. If you want to follow what you think is the national "culture", then fine.

Some excellent examples of what gave it away.

 

[canicemcavoy]

Are you serious!?!?! I cannot believe how many people excuse the bad decisions of people by saying it was what everyone was doing!

I remember when I was 10 years old, my aunt who raised me had a saying for me: would you jump off a cliff just because everyone else was doing it?

It's a pity many adults in Ireland didn't listen to advice meant for 10-year-olds.

Some excellent examples of what gave it away. Some excellent examples of what gave it away.

Another example is the fact that we did - and still - have an "affordable housing scheme" which is aimed at people earning twice the national average salary! These are well off people - in any other country, they would be considered wealthy.

 

[Pat Bateman]

It was perfectly obvious to anyone who had either half a brain or wasn't a vested interest than when average house prices are many multiples of the average salaries and we have building societies with TV ads guilt-tripping parents into funding their children's house, that we're in a property bubble. If you want to follow what you think is the national "culture", then fine.

We also have a culture of drinking heavily; does this mean when alcoholics lose their homes, I should bail them out too?

Are you serious!?!?! I cannot believe how many people excuse the bad decisions of people by saying it was what everyone was doing! As I said before, if those same people that bought because they saw a house becoming less affordable, had sat back and said, I realistically cannot afford this, they would now be seeing houses becoming ever MORE affordable.

How is someone who said back in 2005/6 that there was going to be a huge bust in property a liar? They were absolutely correct! I agree that there are probably quite a few people now that claim they saw it coming, but never said anything. However there were plenty that said so publicly.

I didn't anticipate prices dropping this much in 2008, but I still sold my house by undercutting every other house for sale in the estate. There was absolutely nothing lucky about this decision, and for you to say so, insults my intelligence.




Some excellent examples of what gave it away.

I remember when I was 10 years old, my aunt who raised me had a saying for me: would you jump off a cliff just because everyone else was doing it?

It's a pity many adults in Ireland didn't listen to advice meant for 10-year-olds.

Aren't you all great? Were you all short on the Irish property market or are you just wise after the fact?

Most problems in relation to mortgages are income related (i.e. they've nothing to do with what's happened to the property market). Salaries have been decimated and many people have been let go. We as a society have a duty to help these people out.

Chris, selling your property during 2008 was complete luck, and for you to claim otherwise is an insult to our intelligence.

A national culture of owning one's own home...what a terrible concept.

The self satisfied tone of some of the posts above is frankly disgusting.

 

[gearoid]

The 'holier than thou' sycophants should be ashamed of themselves. Those who claim they knew what was coming are liars. They didn't.

Hi Pat,

There's obviously a lot of anger in your posts, but I think it is misdirected. Aim it at the banks in part for offering massive multiples but there is an element of personal responsibility required.

I stuck to a multiple of less than four times salary based on standard and widely publicised international suggested credit limits. I was being well outbid on properties by people overstating income and taking mortgages far larger than was prudent. I saved for over twelve years, saving large proportions of my salary but didn't feel I was in a position to buy. I also anticipated to an extent what was to follow (see posts below). I sacrificed on housing as I felt I was not in a position to afford. How can anyone now tell me I must fund those who overextended? To an extent I will be prepared to do it through taxation but I find your anger a little hard to take, and your choice of words over-emotive and aggressive. To call people who chose to stay away from the markets and who to an extent "called" the boom, or not to buy a house, "sycophants" is more a sign of your anger than anything else. Yes I am in a good position now to buy a house, but I have saved from my 20's to my 40's to do so. Why begrudge me for doing so?

My views on housing were outlined in several threads including the infamous house price discussion thread from which so many were banned and thrown out of askaboutmoney.

http://www.askaboutmoney.com/showthread.php?t=8219&mode=linear Posts 5 & 12

http://www.askaboutmoney.com/showpost.php?p=176826&postcount=381

http://www.askaboutmoney.com/showpost.php?p=176826&postcount=384

 

[canicemcavoy]

Aren't you all great?

Yep, I am indeed.

Were you all short on the Irish property market or are you just wise after the fact?

Ah, the typical smart-This post will be deleted if not edited to remove bad language retort no. 1 - all of us who didn't buy during the boom were just poor bleedin' skangers (or something) and just couldn't afford it at the time. The fact I could now buy a house with cash I think might disprove this fact.

Oh, wait, no, that's just "luck". ("Smart This post will be deleted if not edited to remove bad language retort no. 2"). I do enjoy the irony that at the same time as insulting us, people like you now think it's supposedly now my patriotic duty as an Irishmen to use that cash to bail out people who, while I was scrimping to save said money, told me I was an eejit not to get on the property market and pick up a couple of investment properties while I was at it, like themselves.

Most problems in relation to mortgages are income related (i.e. they've nothing to do with what's happened to the property market).
Salaries have been decimated and many people have been let go. We as a society have a duty to help these people out.

Salaries are decimated precisely because there were way too high in the first place. A huge proportion of the population was directly or indirectly involved in the property market - most of these jobs are gone, forever. Viable businesses like Roches Stores and the Berkeley Court Hotel closed because there was no point in continuing when they could just sell the land they were sitting on for vast profits. Rents on Grafton Street were more expensive than Rodeo Drive in Beverly Hills(*) - do you really think this had any rational basis?

(*)http://trifter.com/practical-travel/luxury-travel/world%e2%80%99s-most-expensive-shopping-districts/

 

[Chris]

Aren't you all great? Were you all short on the Irish property market or are you just wise after the fact?

If you call shorting the property market selling my house, then yes, I was short, as I sold and rented.

Most problems in relation to mortgages are income related (i.e. they've nothing to do with what's happened to the property market). Salaries have been decimated and many people have been let go. We as a society have a duty to help these people out.

Yes, and the fact that people put every last penny into a property they realistically couldn't afford, without making provisions for lower income , was a very stupid mistake. And I for one do not want to live in a society where the mistakes of some are paid for by everyone else. It's bad enough that the imbeciles in government have done so for the banks.

Chris, selling your property during 2008 was complete luck, and for you to claim otherwise is an insult to our intelligence.

How on earth was it complete luck?!?!?!? By December 2007 the PTSB house price index had been down for 12 straight months. I decided to sell and by March had sold, despite other houses in the estate not selling. There was absolutely NOTHING lucky about this.
Your feeble attempt of merely saying that I was lucky is completely baseless, and it is truly pitiable that people actually want to punish those that did not buy into all the celtic tiger nonsense and made financially wise decision that happen to have been unorthodox at the time.

A national culture of owning one's own home...what a terrible concept.

No, there is nothing wrong with home ownership. But only when people can afford it. Which that last 3 years have proven to not be the case for a huge amount of people.

The self satisfied tone of some of the posts above is frankly disgusting.

Oh yes, I am self satisfied. I made exactly the right decisions, and I am most certainly not going to sit back and not point out where this country went wrong and why so many people are in trouble. People made stupid financial/investment decisions; sometime the truth hurts, but it is the truth nonetheless.

 

[Protocol]

Yes, I was one of those who continually said that house prices were too high, and that people were mad to borrow 100% over 30+ years.

I totally disagreed with any mortgage over 30 years, even 25 is enough.

I always said: "concrete, glass, steel and timber are not in short supply, so houses should not be this expensive".

It costs 90k to build a basic 3-bed semi, so the price shouldn't be too far away from that.

 

[truthseeker]

It was perfectly obvious to anyone who had either half a brain or wasn't a vested interest than when average house prices are many multiples of the average salaries and we have building societies with TV ads guilt-tripping parents into funding their children's house, that we're in a property bubble.

This is hugely patronising. If it was that obvious then why do we have the situation we have now with many thousands of people struggling and unable to sell because of negative equity. Do they all have only half a brain? I know a number of professionals in this position, people with university degrees, are these the people with half a brain?

 

[Pat Bateman]

This is hugely patronising. If it was that obvious then why do we have the situation we have now with many thousands of people struggling and unable to sell because of negative equity. Do they all have only half a brain? I know a number of professionals in this position, people with university degrees, are these the people with half a brain?

Agreed.

An utterly ridiculous comment.

Someone who bought a home for their family and then subsequently lost their job or saw their income decimated is a soft target for 'holier than thou' posters like Chris, Protocol and Canicemcavoy who seem to delight in the misfortune of others. Well done for being wise after the fact guys. Your lack of compassion for your fellow man makes me sick. You got lucky. Others didn't. Simple as that.

 

[canicemcavoy]

This is hugely patronising. If it was that obvious then why do we have the situation we have now with many thousands of people struggling and unable to sell because of negative equity. Do they all have only half a brain? I know a number of professionals in this position, people with university degrees, are these the people with half a brain?

Lots of people bought simply because everyone else was doing it. Just because you have a degree does not mean you're an expert in every field, or have any financial cop-on. I know plenty of very smart people who pay off the minimum on their credit card every month.

Perhaps the "half a brain" comment was unfair; I was letting my irritation with the utterly hypocritical whinging of people like Pat Bateman who have hogged the airwaves in the past 2 years in an attempt to get people like to pay for their investment mistakes the better of me. We have the comical spectacle of Matt Cooper using his radio show to urge a "NAMA for everyone", and his example of someone deserving of a bailout is a Sunday Independent journalist who, as she cries about the "prison" of her negative equity, boasts a lifestyle far outstripping those she expects to pay for his mistakes, even now spends "Saturday afternoon [...] hitting the high-end boutiques of Clarendon Street to find a new outfit for that night."

We had a situation where plenty of people bought houses at the limit of their financial affordability, getting 100% loans, ignoring the fact that the mythical "soft landing" they were being promised had never happened anywhere else, and that the ratio of average house prices to average salaries was completely out of whack compared to anything from the past 70 years in Western history. None of this was a secret.

 

[Brendan Burgess]

Folks, I think both sides of the argument have now been well articulated.

We are descending into insults now, so i am closing the thread.