Never bought a house - the moral hazard!

[needle_too]

Why pay social welfare to someone who didn't study hard and dropped out of school?
Why pay for healthcare for someone who continues to smoke, drink heavily and eat fatty food?
Why, oh why, can't everyone be as perfect as the two posters on this thread?

No ones saying they shouldnt be helped, but they shouldnt be helped at the expense of those who didnt do any of the above.
Are you suggesting that not working in school should guarantee a future income?
People are starting to realise that if they never worked they'd get dole, but if they worked and earned but earned 'too much' they arent entitled to the dole. Htf does that work?

Are you saying that smokers and/or drinkers should get more or better healthcare?

Genius. What do you call this?

Goverment exists because a society it consists of imperfect people acting individually and as a crowd not always doing the right thing, but the government must use its pool of resources to help.

I have no idea what this means.

[absconded]

If it were a choice of either bailing out homeowners or NAMA, I´d have to opt for the former. However, neither is satisfactory. The banks were not charities and should be allowed to collapse in one big catastrophic event.
I wondered from the start why bailing out homeowners was not seen as the first option in recapitalising the banks if it was going to be done at all.
But sympathy for petty landlords and people in 5 bedroom mansions that they could never afford? Nope

[Clanrickard]

There are a couple of crazy letters in the Irish Times these days saying that people's mortgages should be written off in a NAMA style deal.

Bad enough that we have real NAMA, but those who were prudent and knew that house prices ten times the average salary could not be sustained, bid their time and paid their dues by living in rented accomadation. Many of these folks saved well, put their money aside and now deserve the opportunity to buy a house at market value. They have put up with flatmates, living in crappy areas, not having personal space etc.

Now they see their savings devalued by the artificial supports for the collapsing market. Some folks are even talking about a NAMA for homeowners.

Those who were prudent with their money and sacrificed comforts shouldnot be penalised for the stupidity and greed of others. There was a 24 year old kid on the Frontline who was a plumber with a 600K mortgage. I feel sorry for him but why does he get to live in a house that he cannot pay for and I don't get to live in a house that I can pay for under present market conditions?

Not so.The law is weighted in favour of the bank. If you bought a car on HP or leasing then the company repossess it if you can't pay. They don't come after you for the rest of the dough. A bank can take the house of you and chase you for the balance. The item for which you bought the loan is theirs yet they still get their pound of flesh.

I have no problem with people losing their home because of their own negligence and spendthrift ways. But they as citizens have lent money to the banks to bail them out of their negligence and spendthrift ways so feel aggrieved when the same lifeline is not thrown to them.

[Supermanpolitician]

Not so.The law is weighted in favour of the bank. If you bought a car on HP or leasing then the company repossess it if you can't pay. They don't come after you for the rest of the dough. A bank can take the house of you and chase you for the balance. The item for which you bought the loan is theirs yet they still get their pound of flesh.

I have no problem with people losing their home because of their own negligence and spendthrift ways. But they as citizens have lent money to the banks to bail them out of their negligence and spendthrift ways so feel aggrieved when the same lifeline is not thrown to them.

But I have also lent money as a taxpayer and I am getting doubly screwed over, by official NAMA and Provisional NAMA (ie homeowners NAMA if it ever happens).

If I bought a 600K house four years ago when I couldn't afford it, but was still given mortgage approval, I would have lived in a very nice house for the last ten years, not in rented accomadation.

Joe punter bought a 600K house four years ago which he couldn't afford and now he wants me to bail him out?

As I said, where is themoral hazard?

[hammer]

It is absolutely OBVIOUS that there will be a NAMA type deal with residential property owners.

Firstly the loans will go interest only, loan term will be stretched to 40/50 years and eventually there will be part write offs for basket cases with no recourse to borrower.

Absolute certainty.

[hammer]

Bail everyone out. Then get the EU to bail us out

[Clanrickard]

As I said, where is the moral hazard?

Presumably the owner would lose the ownership of the house. The state would own it. The sttae would deduct a significant chunk of Joe Punter's income for rent. Otherwise Joe loses his house to the bank and is then on the local authority housing list or in rented accommodation getting rent allowance. A lose lose for the tax payer but in the first instance we have an asset.

[Supermanpolitician]

Presumably the owner would lose the ownership of the house. The state would own it. The sttae would deduct a significant chunk of Joe Punter's income for rent. Otherwise Joe loses his house to the bank and is then on the local authority housing list or in rented accommodation getting rent allowance. A lose lose for the tax payer but in the first instance we have an asset.

Losing ownership? True but not if this proposed "NAMA for homeowners" goes through.

What was effectively suggested was that mortgages should be written off and people allowed to stay in homes which they bought. I didn't buy because I had sense. But if someone on the same income did,then why should they effectively get a discount on a house that they have already paid for and lived in while I am also paying for it, and not living in it?

[Supermanpolitician]

It is absolutely OBVIOUS that there will be a NAMA type deal with residential property owners.

Firstly the loans will go interest only, loan term will be stretched to 40/50 years and eventually there will be part write offs for basket cases with no recourse to borrower.

Absolute certainty.

That is what I am afraid of.

[Tombo]

Why pay social welfare to someone who didn't study hard and dropped out of school?
Why pay for healthcare for someone who continues to smoke, drink heavily and eat fatty food?
Why, oh why, can't everyone be as perfect as the two posters on this thread?

Goverment exists because a society it consists of imperfect people acting individually and as a crowd not always doing the right thing, but the government must use its pool of resources to help.

But the act of "helping" implicitly rewards the damaging behaviour. That is the "moral hazard".

Bail out people who made stupid financial decisions and they and others watching will see the benefit to them in doing the same again.

I am guessing you don't have any children. Parents come to understand the power of moral hazard.