Grinding despair of negative-equity generation hangs over...

independent.ie/opinion/analy … 37988.html

Co-responsibility - because we’re all guilty!

The point is still being missed. Co-responsibility means ‘Co-’, meaning that the foolish/naive/duped borrower must also bear a loss. So what loss is suitable? To me, a variation on the lose the house lose the debt is the only solution that has a ‘Co-’ in it. Allowing the borrower to keep their house or to have further subsidised living in it is ‘other’ responsibility. There are no effects on the borrower.

One solution would be some element of tax adjustment - that the borrower is responsible for a proportion of their unpayable debt and that this is added as a tax weighting to their income tax rate.

I’m all for co-responsibility - between the two parties involved - the lender and borrower.

Let the bank and the “homeowner” sort it out on their own.

Interest-only for the next 50 years, intergenerational mortgages, Negative Equity mortgages, etc.

Carry on lads.

Unless by “co-responsibility” Carol means somebody else to pay her mortgage…

Oh… right…

Stop being so pessimistic. You’re talking down the economy.
Don’t you know there’s a baby boom going on?
It should only take 25 years interest only! :unamused:

A few years of hyperinflation and they’ll be able to repay the mortgage with a book of postage stamps!

During the Weimar Republic inflation event some savers has their life savings returned as stamps.

Or the Irish political equivalent. “If you bang on about any old shite for long enough, there seems to be so little substance in the level of public debate that you find you start getting taken seriously without actually having to produce any data or even make any sense. So if I bang on about this for long enough, someone else will pay my mortgage for me.”

Does it do to repay this stuff in kind? As in, when she says

Can I just say that, ultimately, if you drive a generation to despair, if you leave them with no help, no hope, no reason to dream for their future and the future of their children, yet still demand every penny they earn to give to pay someone else’s mortgage, they will explode twice. We must accept this self-evident truth – before it’s too late.

I think we need flexibility here.
The borrower who spent way too much to buy an ordinary house (say 3 bed semiD, or smaller) to live in themselves was the victim of a scam, and should be looked after.
Those who bought to let, well, that was a business decision.
Those who bought/built trophy homes should be helped out to the same extent as the 3-bed semiD.

Negative equity in itself as has so often been mentioned here, is not a problem unless you want to move on, and those cases should be facilitated in some way providing we are talking about realistic houses (i.e. I’m not talking about the trophy home or the trader-upper to a “good area” here).

Property developers . walking away scot free . With the benifit of loan warehousing and all liabilities on ice

Regulator . walking away scot free . Big payoff and pension

Government . walking away scot free . Big payoff and pension .

Bankers . walking away scot free , Big payoff and pension .

Legal profession . Walking away scot free . Big fees from government and NAMA

Big accounting firms . walking away scot free, tick , big fees from government and NAMA

Bondholders . paid in full ( may share some future haircuts , although a bit vague )

Anglo . Seanie bankrupt , but does not reallay seem to give a fuck .

Anglo . could be criminal activity , but we will give them a good head start on their getaway .

Those in negitive equity . Lets go to town on them .

What’s the one common factor that links them all?

It was a political decision to set up NAMA, it was a political decision to pay off the regulators, it was a political decision to route the gravy train via the “professional” classes and it will be a political decision to “save” those in negative equity.

Result?

Current National Debt figure €95Bn.
NAMA bonds: €78Bn
ECB/ICB Bank borrowing €155Bn
EU/UK/IMF loan: €69Bn
Bond Market: CLOSED!

If you want to be bailed out - you need to be at the head of the queue.

It was always either the banks or the people.

FF chose the banks.

The money is gone.

The money is not gone . States do not go bust to such an extent that the traffic lights don’t work and Ireland becomes a failed state where investment by Bin Laden comes attractive in exchange for some training camps .

As all of the Irish banks except Irish life have been nationalised ( Ok not BOI , but very soon ) Why should those in NE not be bailed out ? Everybody else is . Why should those in NE share any burden given the open criminality between FF , the developers , Anglo and NAMA ?

+1

I knew without clicking the link that this would be another rant from Harold

Not sure where you’re getting the Bin Laden shite from.

We are with the lender of last resort. You don’t get to just pull strokes/give stuff to people without the IMF/EU signing off on it.They don’t care what you spend the money on, but you have to meet the repayment schedule - so you have to cut somewhere to give away to somewhere else.

So all the strokes/bailouts have been done. Everything after this is robbing Peter to pay Paul.

The money is gone. The growth above inflation is gone. It’s all about repaying debt now. It’s all about interest on interest or default now.

What?

See the previous point - there is no bailout.

The solution to the enormous debt is more debt?

Non-recourse is an answer I’d be happy to see. Convert the average joe public negative equity mortgage to it. Might not please the banks… but tough. As has been mentioned here many times, this allows people the chance to start again, debt free.

As to funding negative equity - I don’t own a house. I rent. I wouldn’t be very pleased ( to put it mildly), if I have to start paying other peoples mortgages indirectly. As it is, I am considering leaving the country given we all seem to have been mugged into paying for the banks.

actually, reading the article I was surprised that she is not actually asking for people to have their mortgages halved and to keep living in the house, but to be allowed hand the keys back…

Carol is right, and we shouldn’t stop there

  • lets bail out the people that invested their money in pension schemes, they didn’t follow the stock market or know what a stock portfolio was, they just did what all irish people did before them, and they trusted the experts
  • lets also bail out the eircom stockholders - they didn’t follow the stock market or know what a stock portfolio was, they just did what all irish people did before them, and they trusted the experts (the Government selling the shares)
  • lets also bail out the people that purchased cars on credit - they didn’t follow the car market trends or know what a resale value was, they just did what all irish people did before them, and they trusted the experts
  • lets also bail out those people that purcashed VHS players - they didn’t follow the developments in the DVD market or know what an avi file was, they just did what all irish people did before them, and they trusted the experts
  • lets also bail out those people that purcashed a Commodore64 - they didn’t follow the computer market or know what an operating system was, they just did what all irish people did before them, and they trusted the experts

and should we not bail-out those people that invested in property in Sunny Beach in Bulgaria…

I mentioned Bin Laden in relation to failed states such as Sudan and Somalia and the fact that Ireland could never reach such a status .

I actually don’t know where to start with this . Ireland has nothing . It has no natural resources . It is a small country on the edge of the Euro with massive debt . Yet oddly for such a small country we seem to have a deep financial connection to Germany and France through its liabilities to German and European banks .

Otherwise why would they have sent in the IMF ? ( I actually buy the FF excuse on this ) So I would think that its Europes problem . If they want protect the Euro , well let them them bail out Ireland on favourable terms . Otherwise the crisis will pass and Ireland will be left on the edge of Europe repaying massive debts for decades and the world will have moved on . The GFC will be written about in history books and will be some abstract class for economic students in years to come . While Ireland will be some kind of case study in how not to deal with a crisis and their amazing ability to repay massive debt .

FF or FG don’t really give a fuck as the taxpayer has always picked up the tab as there never has been a period of prosperity in Ireland , these guys are just used to dealing with shit . And they are used to passing on the burden to the taxpayer .

Given that , we should ( well not me , as I don’t in Ireland ) include the people in NE in the mess of a bailout .And let Europe deal with it .

WGU , I lived through the 80’s in a deprived estate in North Dublin . We were just left to go fuck ourselves back then . They did not give a flying fuck about high unemployment , heroin , joyriding , alcoholism or social breakdown . We were left behind back then but for all our problems there was a way out . How do you escape if you are hundreds of thousands of Euro in negitive equity ?

Ireland has always been one big scam with no accountability . This time we should try to include as meny people as we can in not giving a fuck .

Well, actually and at the risk of getting flamed…

There is a way of sorting out NegEq that doesnt cost the State any cash.

Let the homeowner remortgage by repaying the banks with the banks bonds…

Check it out on offsetdebt.net

The losses go voluntarily to the bondholders, the banks slim down and get lossmaking loans off their books, the homeowner owes less and pays less cash out, leaving them more to spend in the domestic economy…and none of it touches the Government.

Oh, and the economy gets a new lender or two with clean balance sheets and trustworthy deposit taking capacity.

Regards…says he, putting on the flame retardant overalls…

True … but I don’t see what other options there are if you can’t pay, you can’t pay - likely to be the case for many as the rates go up.

Should there be renegotiated mortages to facilitate lower payments and permit people to continue to live in their neg equity home? Hoping someday the prices will rise sufficiently to cover their debt?

OR Do we leave people with (for instance) 200k of debt and no house?

What other options do you suggest?.. artied’s answer?

No one is talking about failed states though. What I’m talking about is growth rates in the economy and surplus capital.

FF and the banks have mortgaged the country’s future.

I didn’t want the banks saved.
I didn’t agree with a blanket guarantee.
I didn’t see the point in NAMA.

What would the alternative be? Iceland.

Their economy dived (less than ours!), they devalued and they got the IMF.

Their economy is back growing and they are talking about paying back the IMF early.

A lot of Icelandic people have mortgages in foreign currencies. With the devaluing they were screwed.Their high court ruled that the banks actually knowingly sold illegal mortgages. The IMF huffed and puffed. The pension funds huffed and puffed. The international community huffed and puffed - but life went on. It didn’t help a lot of people, it hurt some others pensions but it made the point that there was criminality in the banking practices and it wouldn’t be tolerated.

They faced up to the problem, bit the bullet and moved on.

Lots of Icelanders are facing “grinding despair” but it’s the current generation accepting they blew the money and that the bill being presented is theirs.

NAMA, the guarantee, other FF strokes - they’ve spent all the money that could have been used to grow the economy and they’ve borrowed against future earnings that could have been used to grow the economy. The guarantee will continue to make private debt sovereign and allow the zombie banks to survive. The banks will continue to just suck as much money as they can from the economy, continuing to depress the economy. NAMA will try and keep property prices frozen whilst the banks continue to pretend to try and manage their unmanageable losses.

I’m all for forgiving the loans that banks made illegally. I know people in the banks who talked openly (before the “Omertà” kicked in) of practices that they knew were insane but that the had to do to keep making the lending numbers, as set by head office.

Other than that I’m all ears as to how we can “forgive” the debt. Just be sure to tell me where the money comes for it.