Mortgage debt forgiveness?

bobbyjoe · by **bobbyjoe** » Wed Apr 13, 2022 12:47 pm

It will be interesting to see how this pans out. I think the reality of it will be that it will be used to get people off tracker mortgages - in other words people in arrears who have trackers will be the first to be given some kind of way out - that way the debt forgiveness is minimal in that the loan is not earning the bank much anyway. could be wrong"

BlairWaldorf · by **BlairWaldorf** » Wed Apr 13, 2022 12:54 pm

Expanding the mortgages to the next generation.... that is ridiculous... how would that be even possible??

I would agree with the you made your bed, now you have to lie on it view. There were many people who didn't buy a property for mad money during the boom. Just because the masses did doesn't mean they all should be excused. Help is badly needed though.

PussyGalore · by **PussyGalore** » Wed Apr 13, 2022 12:55 pm

I don't think it's a good idea either, I wouldn't wish to burden the future generation with my debt. It's my debt and I am responsible for it. We're really struggling at the moment but I think my pride wouldn't let me accept debt forgiveness, I will continue to pay the mortgage with every last cent I've got.

Just to say, I haven't read the IT article yet so I don't know the ins and outs of the proposal so my answer might be way too simplistic.

I find that while I can just cover the mortgage it's the insurance and services costs (ESB etc) that are causing the problems. Not to mention the cost of petrol/diesel etc :o(

LittleLily · by **LittleLily** » Wed Apr 13, 2022 1:02 pm

I cannot see the pros of this idea out weighing the cons. Theres too many negatives with this idea that I don't think its a good idea.

sugarkk · by **sugarkk** » Wed Apr 13, 2022 1:03 pm

AFAIK intergenerational mortgates are done in other countries... I'm afraid I don't know the exact way that they work, it was just something mentioned by the head of AIB on Morning Ireland this morning.

I agree pretty much with all the points made re the unfairness of the situation - but I do think SOMETHING has to be done as the massive mortgage debt has utterly stifled the economy. And while I don't think this is the way to do it, if a national debate is held maybe an equitable solution will be arrived at. At the time, I thought that the FG plan to extend mortgage interest relief for those who bought at the height of the boom might help - at this stage, it would just be too little too late.

Something drastic needs to be done... I just don't know what it is. Collectively, as a nation, we are crippled by this massive mortgage debt and the property collapse has destroyed our economy. And whilst it would be incredibly difficult for me to see my neighbour have his mortgage paid off whilst I still have to struggle and pay mine... if it could be shown to me that this would ultimately lead to an economic recovery where my other half and future children could get jobs, maybe I could stomach it... Without sounding like a raving commie pinko, maybe there's a bigger picture here and we need to look at a way of dragging all of us out of the mess rather than focusing on what we as individuals would get or not get.

BlairWaldorf · by **BlairWaldorf** » Wed Apr 13, 2022 1:07 pm

I'd love to know how they work because I would be well pee'd off if I had to pay for my parents (hypothetical) mortgage debts particularly if they came about through recklessness.

sugarkk · by **sugarkk** » Wed Apr 13, 2022 1:14 pm

Seemingly they are used in Japan a lot BlairWaldorf, and from the little I've heard about it around the office, you don't automatically inherit the debt but that if you want the house you take on the remaining debt also - according to finance dudes in the office, it's unlikely to happen here anytime soon. (I think it's a debate for another thread though, I think the OP was really talking about mortgage debt forgiveness).

lux · by **lux** » Wed Apr 13, 2022 1:16 pm

BlairWaldorf wrote:I'd love to know how they work because I would be well pee'd off if I had to pay for my parents (hypothetical) mortgage debts particularly if they came about through recklessness.

From what I can gather, a term of say 70 years would mean that when offspring inherited the house or property, the rise in the value of it versus the size of the mortgage would mean the repayments would be quite low. They would have the option of selling and repaying the balance on the mortgage or keeping it and paying off the mortgage. I know my life assurance policy covers the balance of the mortgage at the time of my death if I haven't paid it off so I'm not sure how this would factor into intergenerational mortgages.

It was very common in Japan in the late 80s/early 90s, a colleague told me.

sugarkk · by **sugarkk** » Wed Apr 13, 2022 1:18 pm

Cheers Lux... I was googling to find something to post but you and your colleague have it right.

LastRolo · by **LastRolo** » Wed Apr 13, 2022 1:29 pm

We haven't a big mortgage (we built on our own land and built via direct labour). When OH applied for the mortgage he was offered double what he accepted, which I know a lot of people didn't do. OH was wise enough to see what he could afford.

Even though ours is a small mortgage (c. €180,000) Me and OH struggled to pay our mortgage when OH wasn't working and I was only starting in my current job. We did without a lot of stuff so that the mortgage would be paid - so why should people who took our mortgages they couldn't afford and just stopped paying just have their debt wiped.

nelswife · by **nelswife** » Wed Apr 13, 2022 1:30 pm

No i dont think its a good idea and i don't think its very fair either, we have never ever missed a mortgage payment no matter how hard it may be sometimes, it the 5 years that we have our house our wages are down by almost €20k between us, and we are still paying all out bills and mortgage every month !...

Will probably be mobbed for suggesting this, but i do think that they should consider helping people in negitive equity

ie..just say you got a mortgage for €250k, have paid off €30k and have €220k left to pay on our mortage but your house is only worth €180..maybe pay the balance off for everyone in negitive equity i.e pay off €40k off the mortgage!!...that way its fairer, and people will to try continue to pay off their mortgage rather then just stopping to pay it altogether in the hope of it being written off!!

lux · by **lux** » Wed Apr 13, 2022 1:34 pm

I think its extremely difficult to caluculate how much negative equity people are in. There is a total oversupply in the market and house prices are still dropping. There are so many variables in the price of a house where do you begin? I bought my house for €356k and similar ones are now selling for €345k, but I know one sold for €325k because it was an estate sale and the family wanted to offload it as quickly as possible.

Also, if all of the housing stock, or even 50% of it, which is being held back from sale was released, it would further depress prices. So if you get a write off of €50k but you suddenly lose another 10% of the value, what happens then? How do you begin to determine what each property is worth?

ReginaFalange · by **ReginaFalange** » Wed Apr 13, 2022 1:36 pm

nelswife wrote:Will probably be mobbed for suggesting this, but i do think that they should consider helping people in negitive equity

ie..just say you got a mortgage for €250k, have paid off €30k and have €220k left to pay on our mortage but your house is only worth €180..maybe pay the balance off for everyone in negitive equity i.e pay off €40k off the mortgage!!...that way its fairer, and people will to try continue to pay off their mortgage rather then just stopping to pay it altogether in the hope of it being written off!!

Sorry, I don’t see agree with this suggestion at all and TBH don’t think that it makes much sense.

Most people are in NE of some description in this country but if you are able to pay your mortgage then it shouldn’t matter if you’re in NE or not.

What if the market picks up again- do you pay the bank back?

SaraD08 · by **SaraD08** » Wed Apr 13, 2022 1:37 pm

I dont really agree with paying the "balance" off people negative equity...

the market is all about risk... if property went up in value wouldnt be prepared to increase their mortgage to bring it in line with the value... no... so fair is fair... prices rise as well as fall...

lux · by **lux** » Wed Apr 13, 2022 1:40 pm

SaraD08 wrote:I dont really agree with paying the "balance" off people negative equity...

the market is all about risk... if property went up in value wouldnt be prepared to increase their mortgage to bring it in line with the value... no... so fair is fair... prices rise as well as fall...

I agree. No one was forced to buy a home. Renting was always an option for people. I know some people who rented and were told they were wasting their money. Many of them now have bought lovely houses the people who grabbed money to get on the ladder in the good times would kill for.

If you buy a car with a loan and its value drops as soon as it goes on the road or you buy shares and they fall in value (I had Anglo shares >:o(

!), no one suggests you don't pay for the full loan or get a refund in the share value.

Who is online