We got a 100% Mortgage because they were throwing money at us!

[feargach]

Falling wages, Higher Taxes, Higher Energy costs and Higher fuel costs along with negative equity in a persons main asset ( their home ) will mean the repayments on the debts they accrued will not be met.

This would not be a problem for the Banks, if this was a small number of individuals but this is half the country.

We already have 300,000 empty houses worth very little maybe even nothing, so repossessing another 300,000 is not a very clever move for the Banks.

The only solution for the Banks is a writedown of these debts ( a debt forgiveness package )

If the Banks do this they will have to default on their Bondholders.

If the Banks do not do this, then the struggling mortgagee will default on the Bank. So same scenario, different method of getting there.

All of this is coming down the line, either we own up to the mistakes and deal with them now, suffer and bounce back within a couple of years or we drag the pain out for years and pass the problem to the next generation.

Well pointed out.

TBF's "take responsibility" mantra is all very well, but as a practical solution it's worse than useless.

In order to "take responsibility", that means that every negative-equity schlub will have to cut his spending to the bone.

Let's assume that every indebted person in Ireland suddenly is overtaken by the urge to follow TBF's orders. They all cut their spending, stop buying clothes, chop up all their credit cards and pay everything off.

So house prices continue to sink, until the jobs disappear, and half the negative equity crowd are down to one salary. So they go into arrears, beg money from family, cause their marriages to get strained so the couple splits. Once each family has split or run out of money, the only recourse is for the bank to sell the house for an average of €100,000 less than is still owed on it. Then the former mortgage-holder is adjudicated bankrupt and the bank gets nothing and what was an asset vanishes from its books. Multiply by 50,000 couples and the bank is toast. Then Ireland is on the hook for all the bank's deposits and we have to go to the EU begging bowl.

Morally, that is arguably excellent. Practically, that's a disaster. But a MORAL disaster, so that's OK.

For those of us who care more about avoiding national disasters rather than suffering those disasters in the most moral way possible, more thinking is required.

TBF's cartoon morality will bankrupt us all by wrecking banks which our government has guaranteed the deposits of.

Good going toughbutfair, why don't you shoot my dog while you're at it?

The fact is, I'm on the hook for the deposits of those banks if they fail, so I'll be ignoring any advice that would cause them to fail while I am on that hook.

[The Underdog]

I don't know how you can think it is cowardly to repay the money you borrowed.

FAIL- where exactly did I state that ?

Didn't these people voluntarily borrow the money? how about people who bought in 2000 and sold for whatever reason in 2006 (gains tax free), were they victims?

I don't know what your "hiding" comments are about. They don't make sense.

You want to hide the real cause of the problem. The FF property pyramid scheme swindle.

[FlyOver]

If everyone had stopped for a minute during all the crazy house bonanza years to take the sound advice of the planners, we wouldnt be in this mess. You didn't listen and now look where you all are! You reap what you sow.

There was no way of stopping this train, it had too much FF momentum. FF used the two biggest human emotions, fear and greed to keep this property boom going. The most intelligent planner could not have had a chance in hell of getting the most level headed buyers to listen.

[WTTR]

Yes. The banks were wrong. The borrowers were also wrong and irresponsible. I have no time for the nonsense being spouted in some quarters;

"I lied to the bank about how much I earned, and borrowed on the sly from the credit union, and pretended I had a deposit, to buy a house I could barely afford with the interest levels as they were, and absolutely can't afford now I'm not getting bonus/commissions/my pay has been cut. This massive irresponsible gamble with my income and life hasn't paid off, as the house price has gone down, and I can't sell it. Who is going to bail me out?"

No one. And no one should.
People should stress test their financial decisions. They should be responsible, take advice and make their own decisions.


I don't really get this bit.

I see your point about not bailing out the people who were given jumbo mortgages. But you are not taking into account the very real financial harm that these mortgages are having on the real economy. I calculate that the jumbo portion is around €80bn. This amount of mortgages is not owned by the Irish financial institution who gave out the mortgages but by bank bond holders i.e. international hedge, pension and banks. The amount leaving the country as annual mortgages are repaid is c.€6bn. This money is earned by our young mortgage holders and is earned in every locality in Ireland, but when the repayments hit the local bank it disappears from Irish trade. It is not lend out again by the banks, it is not like Rates where it would go into hospitals, education, roads etc. It is GONE and once it hits our banks, it is GONE for ever!

It is a loss to our economy equivalent to €1,250 for each member of our population annually. This is equivalent to annual expenditure of €6,000 for a family of four. THE REPAYMENTS ON JUMBO MORTGAGES ARE CRIPPLING OUR INTERNAL TRADE. This would be highlighted more if our government recognised the true reasons for the collapsing tax income for the exchequer instead of putting out one liners that the economy is turning.

The Christian family up to the last quarter of the 20th century was always a stated aim in Ireland. Its built into the constitution. But it has been done away with; with many anti Christian laws introduced by Leinster House. There is no way that an Irish or EU government with demonstrative Christian values would allow bankers to lump the family with jumbo mortgages.

[The Underdog]

If everyone had stopped for a minute during all the crazy house bonanza years to take the sound advice of the planners, we wouldnt be in this mess. You didn't listen and now look where you all are! You reap what you sow.

In my experience that deeply "sound advice" consisted of the colour and type of windows.

[The Underdog]

Respect your planning betters, we went to college to learn about these things, not you or Bertie Ahern for that matter. We have a job to do, but the people wont listen and look what happened when the *********************************** gombeens got their way. Bad planning indeed. For ******************** sake, why cant you pepole ever learn for once?

Hello Field Marshal

[Right is right]

Well pointed out.

TBF's "take responsibility" mantra is all very well, but as a practical solution it's worse than useless.

In order to "take responsibility", that means that every negative-equity schlub will have to cut his spending to the bone.

Let's assume that every indebted person in Ireland suddenly is overtaken by the urge to follow TBF's orders. They all cut their spending, stop buying clothes, chop up all their credit cards and pay everything off.

So house prices continue to sink, until the jobs disappear, and half the negative equity crowd are down to one salary. So they go into arrears, beg money from family, cause their marriages to get strained so the couple splits. Once each family has split or run out of money, the only recourse is for the bank to sell the house for an average of €100,000 less than is still owed on it. Then the former mortgage-holder is adjudicated bankrupt and the bank gets nothing and what was an asset vanishes from its books. Multiply by 50,000 couples and the bank is toast. Then Ireland is on the hook for all the bank's deposits and we have to go to the EU begging bowl.

Morally, that is arguably excellent. Practically, that's a disaster. But a MORAL disaster, so that's OK.

For those of us who care more about avoiding national disasters rather than suffering those disasters in the most moral way possible, more thinking is required.

TBF's cartoon morality will bankrupt us all by wrecking banks which our government has guaranteed the deposits of.

Good going toughbutfair, why don't you shoot my dog while you're at it?

The fact is, I'm on the hook for the deposits of those banks if they fail, so I'll be ignoring any advice that would cause them to fail while I am on that hook.

How does negative equity mean that you have to cut your spending to the bone????

Negative equity is only an issue if you are -
1 - Looking to sell
2 - Looking to release equity for other purposes...

If your repayments are 3k per month it doesn't matter whether the house is worth 100k or 800k if you are earning you can pay it.

If you have taken a wage cut or lost a job then it might become an issue but if you had taken insurance out against this then you should be ok. If you go to your lender straight away and go interest only you should be ok. If you have had savings you should be ok. If you cut out the drink, smokes, 2 cars, foreign holidays, meals out/takeaways, fancy clothes, sky sports etc etc you will find it tough but no diferent to what people in the 60's/70's/80's had to do...

[FlyOver]

... If you cut out the drink, smokes, 2 cars, foreign holidays, meals out/takeaways, fancy clothes, sky sports etc etc ..

Hehe, that's a big part of the consumer economy you are putting into recession

[Right is right]

Hehe, that's a big part of the consumer economy you are putting into recession

Not necessarily -
Smoking/drinking while supplying revenue in taxes also lead to long term economic cost for the health services.
Foreign holidays don't benefit the nation and if people holidayed here instead it would improve it.
Sky Sports etc leads to money leaving the country as well
Designer labels also when you can be buying in Penny's instead of BT.
Take-aways/meals out when you can be cooking at home...

People make choices and decisions as to what they do with their money. If people want to waste it that is their choice but no sympathy should be forthcoming.

[WTTR]

How does negative equity mean that you have to cut your spending to the bone????

Negative equity is only an issue if you are -
1 - Looking to sell
2 - Looking to release equity for other purposes...

If your repayments are 3k per month it doesn't matter whether the house is worth 100k or 800k if you are earning you can pay it.

If you have taken a wage cut or lost a job then it might become an issue but if you had taken insurance out against this then you should be ok. If you go to your lender straight away and go interest only you should be ok. If you have had savings you should be ok. If you cut out the drink, smokes, 2 cars, foreign holidays, meals out/takeaways, fancy clothes, sky sports etc etc you will find it tough but no different to what people in the 60's/70's/80's had to do...

The above appears to have some credence when you judge it by the narrow viewpoint of the couple paying the mortgage.

But if you look at it from a national scale, see my last submission No 144 above. The Negative Equity proportion of our mortgages will soon be nearly equal to the "jumbo proportion" of total mortgages €80bn. This entails a direct transfer of €6bn annually straight out of the country. This is a direct loss to Internal Trade, so is the soon to be €5bn in interest payments on our National Debt, add in the cutback in Government Spending of €4bn. That is a total of €15bn annual loss to Irish Internal Trade; this leads to the equivalent of less annual spend of €15,000 for a family of four. Is it any wonder that we are suffering?

• Unemployment of near 500,000
• Retails units closing down by the hundreds on a monthly basis
• Employess asked to take massive wage and salary cuts
• Massive emigration starting up again
• Etc

If we put €80bn into the economy as I stated earlier by knocking near this amount off jumbo mortgages; http://www.politics.ie/showthread.ph...ml#post2658082we could get the Internal Trade of Ireland up and running again. This would be using money as a means to achieve a given end.

The use of scarce resources to resuscitate dead banks is the use of money as an end in itself, and just disappears into a financial black hole. The total amount of financial gambling debts in the International Financial system is $600tn when the combined GNP of world countries is $60tn. Irish Banking via the IFSC have been found to be swimming naked as the tide goes out!

When are our Pothole Politicians going to face reality that by ignoring world wide trends over the past 10 years, they have set Ireland adrift in turbulent waters with a massive €80bn Negative Equity hole? They are living in Cloud Cuckoo Land and a pitch fork won't budge them; now they can't even cover in the potholes as I became too aware after suffering €500 damage to my car!

As an accountant, I am finding that half my clients have reluctantly signed on for the Dole, some in their fifties, for the first time in their lives! Rescue the banks, my ar.e! When the banks are rescued, do they then throw out money to rescue Internal Trade? No, our banks will have learned their lessons and will hold onto their umbrellas and turn their nooses up on the people who the government did not favour - the poor mugs in Negative Equity.

Do the government not realise the gravity of the international situation now facing us? We will be caught in the dangerous eddy as the great Western Economies go into rapid decline, caused by the hidden power of demographics and not any highly visible terrorist deed. The hole that Leinster House is digging is getting deeper and the further down they go, the less opportunity for movement. A former leader had much firmer foundations to stand on, when he resisted international pressure. Leinster House now, more than ever for the sake of our future, our young workforce, badly need a stabilising influence. Taken from the editorial, Mayo Association Yearbook 2002