Never bought a house - the moral hazard!

[dunno]

That is what I am afraid of.

Will there be a bailout for the suckers who pay their loans, negative equity or not?

[Supermanpolitician]

Will there be a bailout for the suckers who pay their loans, negative equity or not?

Of course not.

What's worse you will pay the loans, and your taxes....and you will get nothing in return.

[toughbutfair]

Of course not.

What's worse you will pay the loans, and your taxes....and you will get nothing in return.

They will get their house in return!!!!!!!

[needle_too]

The fairest solution is to make all mortgages 'non recourse'

If you can't pay your mortgage, you must sell your house. All the proceedings of the sale must go to clear the mortgage, If there is negative equity, that gets written off.

This wont work for the simple reason that the 'loss' on the property has to be taken by someone. In this situation the banks would have to be supported and many people are left homeless. You are turning a financial crisis into a social catastrophe.

We need a solution that is fair and equitable, 'revenge' is pointless.
We are a Republic, a democracy based on Christian principles and we carry each other. Thats the deal, like it or lump it.

That said, those who fkd up need to pay a price, so read on.....

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

Absolute certainty.

Not so sure. Will they be willing to pay the price?

That would be lunacy no doubt and highly irresponsible. There would have to be some pain felt by the home owners.

Absolutely, but there is nothing to be gained from throwing people out on the street.

However we must distinguish between those who have investment properties and those who have a family home.
I for one can see Mr Fianna McFail being a smartarse and claiming the family home as his own, the first investment property as the wifes, the second as young PJs the 3rd as JJs the 4th as TJs the 5th etc etc etc

Solution -
In the first instance anyone applying or being accepted for such a scheme should immediately be excluded from govt employment and/or social welfare for the duration of their partaking in the scheme, including pension entitlements.
THIS SHOULD INCLUDE RELINQUISHING THE RIGHT TO VOTE.

If the responsible citizens of state are to carry failed speculators then the benefits must accrue to those responsible citizens. Watch the FF'ers run from that one.

More later as I read the thread....possibly

[ivnryn]

The fairest solution is to make all mortgages 'non recourse'

That sounds reasonable. I am not sure I agree with making it retroactive though.

If the rule had existed, perhaps we would have seen fewer 100% mortgages. The banks would have made sure that the property that was being bought was worth more than the mortgage.

Introducing it now could very easily rule in lots of tactical defaults though.

[Akrasia]

This wont work for the simple reason that the 'loss' on the property has to be taken by someone. In this situation the banks would have to be supported and many people are left homeless. You are turning a financial crisis into a social catastrophe.

They wouldn't be homeless, they would just have to move out and rent or apply for social housing.
Currently there are people being forced out of their houses and still expected to pay large monthly repayments to the bank to cover the negative equity.

[Akrasia]

That sounds reasonable. I am not sure I agree with making it retroactive though.

If the rule had existed, perhaps we would have seen fewer 100% mortgages. The banks would have made sure that the property that was being bought was worth more than the mortgage.

Introducing it now could very easily rule in lots of tactical defaults though.

The jingle-mail would certainly be a feature if this measure was introduced, but so too would a firesale of properties. (which i think is a good and necessary thing. We need to get property prices down to their true market level sooner rather than later if we have any hope of starting our recovery. Once the floor in the market is reached, activity will resume and the costs of living and doing business in Ireland should be more competitive

The Banks might lose out on long term profits, but they would get a short term injection of cash as properties are liquidated and mortgages cleared earlier than projected. They could write down the losses on these loans over a 40 year period.

[hammer]

Here's a quick lesson in economics, depressions & understanding spin.

If you buy something, you have to pay for it.

Hows that?

Majority of Irish people are financially illiterate.

They make decisions after reading economic updates, listening to estate agents , reading auction results, listening to valuers, .....................and then 4 years later find out that it was all one big game with the host being Bertie Digout, the man with no interest in money, a simple man that loves the Dubs & a few pints of BASS. Boll..................................

[hammer]

How can Joe the Plumber have a crystal ball when the central banks with all the experts, economists and reports couldn`t see anything other than a soft landing. Even the ESRI experts only saw that Irish Property was overvalued by 15%

These are geniuses and well paid for their knowledge.

Joe the Plumber knows how to plumb

[Aindriu]

How can Joe the Plumber have a crystal ball when the central banks with all the experts, economists and reports couldn`t see anything other than a soft landing. Even the ESRI experts only saw that Irish Property was overvalued by 15%

These are geniuses and well paid for their knowledge.

Joe the Plumber knows how to plumb

David McWilliams certainly wasn't :mrgreen: