Mortgage debt forgiveness?

Momof2 · by **Momof2** » Wed Apr 13, 2022 1:42 pm

ReginaFalange wrote: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.

Agree with this NE is only an issue if you want to sell. My house has fallen in value since I bought it but I don't view it as an asset its my home.

sugarkk · by **sugarkk** » Wed Apr 13, 2022 1:46 pm

The thing is Nelswife, when you talk about writing that debt off, it's still us (i.e. the taxpayer) who has to fund that write off (via the banks). So we are still actually paying for it, just not in a direct way.

Just one other thing though, I do think that it should be made clear that the suggestion by the head of AIB was to write off mortgage debt IN RETURN FOR part ownership of the house, not just to write off debt altogether. That way madness lies... I think it's really important to the debate that that is remembered. It's not just "hey, you messed up and overborrowed, have your house for free on us". It would be "hey, you messed up and overborrowed, but we messed up by giving you too much and not judging properly if you could pay it back... we'll take half your debt if you give us half your house". Kinda like shared ownership but done post-sale rather than pre-sale?

(Am open to correction on any of this).

Another thing to think about is what if all the people who are currently struggling with the mortgages (about 100,000) foreclose - they can't pay so their houses are taken off them and they are kicked out on the street. So what happens? They are rehoused under social welfare - so either way (debt forgivness or social welfare) the taxpayer is paying to house these people. Maybe they "learn a lesson" if they are kicked out of their house, but I'm sure they'd prefer to stay in their own home and give up half their house to the bank instead.

MizMelanie · by **MizMelanie** » Wed Apr 13, 2022 1:47 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 here as well but what they could do is treat the disposal of a PPR as a taxable event. That way, if/when people eventually sell their family home at a profit, the profits would be taxed to the extent they received a discount on their NE or loan in the past. So like a balancing event to ensure they don't actually profit from the sale when they'd received a discount in the past.

I don't really know how any of it will get resolved particularly now with the ECB rate increases looming then it seems as though the country will plunge further into crisis with more and more mortgage holders falling into arrears. The banking situation and property situation will have even more knock on effects so I really do believe something needs to be done, I just don't really know yet how debt forgiveness could be the answer.

SaraD08 · by **SaraD08** » Wed Apr 13, 2022 2:12 pm

MizMelanie wrote:
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 here as well but what they could do is treat the disposal of a PPR as a taxable event. That way, if/when people eventually sell their family home at a profit, the profits would be taxed to the extent they received a discount on their NE or loan in the past. So like a balancing event to ensure they don't actually profit from the sale when they'd received a discount in the past.

I don't really know how any of it will get resolved particularly now with the ECB rate increases looming then it seems as though the country will plunge further into crisis with more and more mortgage holders falling into arrears. The banking situation and property situation will have even more knock on effects so I really do believe something needs to be done, I just don't really know yet how debt forgiveness could be the answer.

thats actually not too bad of an idea ... def fairer than clearing off NE debt

bazinga · by **bazinga** » Wed Apr 13, 2022 2:13 pm

What's NE?

lux · by **lux** » Wed Apr 13, 2022 2:14 pm

Angel Doodle wrote::-8 What's NE?

Negative Equity!

SaraD08 · by **SaraD08** » Wed Apr 13, 2022 2:14 pm

negative equity :-8

MizMelanie · by **MizMelanie** » Wed Apr 13, 2022 2:17 pm

SaraD08 wrote:thats actually not too bad of an idea ... def fairer than clearing off NE debt

Thanks - I should be running the country ;o)

SaraD08 · by **SaraD08** » Wed Apr 13, 2022 2:22 pm

MizMelanie wrote:
SaraD08 wrote:thats actually not too bad of an idea ... def fairer than clearing off NE debt

Thanks - I should be running the country

thats actually not a bad idea either :o0

by **bubblybride2010** » Wed Apr 13, 2022 3:10 pm

I dont agree with it at all! we have 2 mortgages, 1 which is in negative equity, and we never miss a payment, its a legally binding agreement whereby payments are not to be missed.

It is tough going, but as someone else mentioned, no one held a gun to our heads and forced us to take out the mortgage, there are always options if something happens our circumstance, eg interest only for a term, or a mortatorium for a month or 2 -or an agreement to made with the banks first,

Those very ones that get the mortgage debt payed off will prob be off out shopping or in the pub >:o(

bazinga · by **bazinga** » Wed Apr 13, 2022 3:13 pm

lux wrote:
Angel Doodle wrote: What's NE?

Negative Equity!

Even more suitably embarrassed, should have got that

by **lastminutebride** » Wed Apr 13, 2022 3:23 pm

MizMelanie wrote:I should be running the country

I'd vote for that :-D

When we bought our house, we put down a 30% deposit and borrowed less than three and a half times our income. I know people who got 92% or 100% mortgages for nine or ten times their income. Obviously, they got much bigger and fancier houses than we did, proportionally. Now we're being told that, because we stuck to what we could afford, we'll end up paying for their bigger houses as well as our own smaller one? flip that for a game of soldiers.

I'm not dissing the people who bought more house than they could afford. I'm pretty positive that I've done as many stupid things in my life as anyone in this country; that just didn't happen to be one of them. The difference is that no one's suggesting that the people who didn't do those stupid things should pay for mine.

I know it's basically a shared-ownership scheme, but still: it would mean that the banks end up with less liquidity, they'd need to go back to the government for more top-ups in order to keep running, and we're the ones who pay for that. And there's no guarantee that the part-houses owned by the banks would ever bring in the amount of money that's been written off - so again, we'd end up paying for the difference.

mrswifey2012 · by **mrswifey2012** » Wed Apr 13, 2022 6:22 pm

Kaycee wrote:to be honest i'd be absolutely disgusted at this (well what I know of it initially) surely you made your bed and you have to lie in it. i'm now being punished because i didn't buy property actually...

no lessons will be learned. sorry to ladies who are in trouble if this seems harsh but my taxes are now going into these banks and no money is going to be paid back and the thoughts of mine or any future children going to be punished in so many different ways. nobody held a gun to anyones head and told them to buy property. obviously a simplistic view but i am 100% against debt 'forgiveness'. there has to be a better way (agreements on payments ect, a grace period while people are out of work) but ultimately money you borrowed should be paid back or hand back the house!

+1.
We now can't get any sort of a decent mortgage because literally the bank have no money to give us. I'm disgusted. Everyone is very quick to point the finger at the banks etc., but we can't forget that we're the ones who accepted the money. Anyone who thought that the 'good days' would never end are sadly very very naive. All good things must come to an end.

However, I know many of my family and friends who are struggling badly and I have sympathy but as I always say, you made your bed!

by **newmammy** » Wed Apr 13, 2022 6:36 pm

I know i'll be really annoyed if this happens. I know that a lot of my friends etc. own houses which are a lot bigger than mine, and also borrowed on their mortgage to buy two new cars, pay for a wedding and had fabulous holidays. Myself and hubby saved 10% deposit to buy our house, borrowed only enough to put up the blocks and pay for the site and for the last five years have been saving to furnish and decorate each room and do our garden, our tarmacadam etc. When we moved into our house the only rooms whcih were liveable were the kitchen, one bedroom and en suite. We were also engaged for nearly three years while we saved 30,000 to pay for our wedding in 2006. We drive a twelve year old car which is not big enough for us now that we have children and the only foreign holiday we have had in the last six years is our honeymoon. I know ill be furious if we have made all these sacrafices for nothing. I've lost my job but we can afford to pay our mortgage (we struggle some months but its always the first thing that we pay) because we were careful. If people I know get portions of their mortgage written off because they have been having a good time for the last six years or so i think its very unfair. I also think passing on debt to the next generation is very unfair on children. Im sorry if this sounds really mean but the way I see it is nobody made anyone buy a house - and also when you enter a mortgage agreement it is written on every piece of paper you receive that if you don't keep up your repayments your house is at risk.

Also, i think the banks saying this is going to cause them problems because I think a lot of people who are struggling will now let their mortgages go into arrears. I know I would love to have the extra 1,100 a month whcih we pay on our mortgage to do all the things I cant do now that Im not working

LazyBaby · by **LazyBaby** » Wed Apr 13, 2022 8:07 pm

sugarkk wrote:Another thing to think about is what if all the people who are currently struggling with the mortgages (about 100,000) foreclose - they can't pay so their houses are taken off them and they are kicked out on the street. So what happens? They are rehoused under social welfare - so either way (debt forgivness or social welfare) the taxpayer is paying to house these people.

what about renting?
it annoys me a lot to hear about people pleading that if they're house is repossessed, then "i'm homeless" - I rent - does that make me homeless??

I understand it's a bit simplistic, but if you can't afford your high mortgage payments, then you downsize accordingly -cut your cloth etc etc
debt forgiveness also punishes those who did not purchase houses and rent instead - so in that case, landlords are being bailed out, but tenants are shafted
it's a difficult situation - how do you decide between those who won't pay vs can't pay

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