Should we provide support for those in mortgage debt?

Should we provide support for those in mortgage debt?

Should there be a Mortgage Debt Forgiveness plan?An article in the paper last week by several well-respected and well-informed economists said that the boom has left tens of thousands with debts they will never be in a position to repay. These debts, they say, are poisoning the balance sheets of Ireland’s banks, preventing the emergence of an economic recovery, as well as causing untold social misery. They suggested some degree of individual debt forgiveness and restructuring plan.

Recent figures show:

  • 200,000 households are in negative equity
  • 36,000 mortgages were in arrears of three months or more, with collective arrears of just over half a billion euro
  • and more than 100,000 also find themselves in difficulty paying the interest costs on their personal home loans

In reply to the article many think that even a partial debt forgiveness plan would incentivise homeowners in negative equity / debt to stop making mortgage payments. Such a plan would amount to “free money”. Earlier in the year Financial regulator Matthew Elderfield also expressed concern over support or alternatively payment options… “In seeking to assist households in difficulty, we need to recognise that the cost of any support will be borne by those neighbours who avoided excessive borrowing themselves or are gritting their teeth and meeting their obligations” he said.

Have Your Say:

  • Should support be provided for those with mortgage debt
There are 78 comments for this article
  1. Commercial Mortgages at 6:22 am

    Hi Friends,
    We should help those who are in mortgage debt because they are unable to pay the debt but they have the asset with them which can be later sold out to pay those debts.

  2. Sarah at 7:41 pm

    Exactly, banking is too important to be left to the bankers because their actions are motivated by personal gain. But their selfish ‘more, more, more’ actions impact every person of every generation. It’s like the old gambler who said to his friend, “you lost on that bet, shame, we could have won!”

  3. Harry at 11:43 am

    @73 Sarah

    Fantastic post Sarah, and what an excellent idea a 15% devaluation in mortgages is, sadly events over the weekend have probably ruled out any hope of any sort help for the people of Ireland.

    It stuck me though, that listening to all the talk about “market confidence” about Irish bonds that what was REALLY happening is that the bond markets were speculating against the Irish bond market resulting in the Irish bail out from the EU/IMF. Once again the naked greed of faceless bankers is destroying a national economy, I suppose that now that Ireland is out of the bond markets they will start attacking the Portuguese or Spanish bond markets.

    Government bonds are a financial vehicle that allow governments to raise money and for most countries they are seen as a solid gold standard. The implications of what has happened over the last week are horrendous as it means that the banks have become more powerful than some countries.

    Why do we have to “fix” the economy of a country to match the expectations of an international money making machine, there was a time when only land owners had a say in running a country (or even a vote), are we now in a situation where only stockholders will have a say in how countries are run? Has “one man, one vote” become “one share, one vote”?

    Georges Clemenceau, French statesman, physician, and journalist, Prime Minister of France 1906-1909 and 1917-1920 once said “War is too important to be left to the generals”, perhaps the time has come to say that banking is too important to be left to the bankers.

  4. mick at 12:53 am

    Sarah #73, I’m not averse to debt restructuring, but am averse to debt forgiveness. Why should those who didn’t benefit from the housing boom pay for those who were unfortunate to be impacted by the bust? I don’t own a home yet. That option it is starting to become more affordable, but prices are still hugely inflated in my opinion. My brother owns 2 houses and one is worth 50% of what he paid for it. It was a gamble and he is now in negative equity. He wouldn’t expect someone else to foot his bill, he’ll just have to keep making his mortgage repayments. If he loses his job, the mortgage repayments would not be affordable irrespective of the value of the house.
    I’m all for the government providing a safety net for society, but it shouldn’t extend to debt forgiveness. As for Nama, it will just line the pockets of lawyers, accountants etc while fleecing the tax payer. The government would have been better letting the banks fail and using tax payer money to buy bargain price social housing from which it could earn an income stream and developed a more robust safety net for future generations.

  5. Sarah at 2:22 pm

    Mick, some feedback on your post
    “I don’t see how debt forgiveness will help banks. Writing off debts will not improve their balance sheets, only keep it the same (if fully provided for) or make it worse (if not)”

    Debt forgiveness is not about the banks, it is about people. People who were unlucky at the time they bought their home and now face overpriced mortgage repayments, for a house they can’t sell, whilst their wages decrease and taxes increase to pay for the developers who are in the exact same situation as the homeowner, just on a bigger scale.

    “Homeowners are adults and made their own beds. Bailing them out now will result in increased risk of moral hazard and a higher probability that history will repeat itself.”

    Yes people did make their own bed, nobody forced overpriced properties into peoples hands, but a failed regulatory system and a government who encouraged an unsustainable property boom are at the very core of these inflated prices, yet its the buyers who are left with a ruined future and no chance to start a family. Economics works in cycles, so history will repeat itself and what the future generations do should be what is best for their population and not to ‘teach them a lesson’

    “The free-falling house prices are a necessary market correction and will benefit future home buyers, including those who were previously priced out of the market. Any bail out will keep prices artificially high, burden taxpayers, make for a longer recession and santion the behaviour that got Ireland into this mess in the first place.

    No, a bail out is not the right word. To devalue mortgages to a minimum of 15% above the current market value, with a 6 monthly review is in line with the market is what is needed. This will reduce mortgage repayments, bring more money into the economy, allow people to cannabalise their negative equity and enter the housing market again, kick starting the market to more realistic prices. All the social problems that come with negative equity are being ignored! If you feel that devaluing mortgages ‘sanctions bad behaviour’ why do you feel that NAMA is acceptable? Lucky for you, you arent in this bleak situation, but that is the difference between you and a person in negative equity. Luck.

  6. Jason O’Connor at 1:30 pm

    @70 Harry

    Excellent post Harry, you are spot on mate.

    And for my tuppence worth…

    I bought my house at the height of the property bubble but it was a case of having to get on the ladder, I missed the boat earlier but as you say 71.Mick…I made my bed.

    What gets to me is that I paid probably € 70-90k over what my property is now worth to a developer who can go cap in hand to Nama and have his debts written off, thats 1 house in an estate of 60 houses half of which are now in negative equity or paid more for their propert than it is now worth…that could equate using my negative equity figure to over € 2.1 million on 1 estate and this is fine by our current government. You then have the banks who gave false information to NAMA with regard to how these developers loans were performing which amounts to FRAUD, no other word to describe it and who has been brought to account thus far? No-one, not one single person.

    The bottom line is that not only am I stuck with an overpriced mortgage but I am now paying taxes on some of the monies the devloper received for the house because developers have defaulted on their loans and we the taxpayer have had to bail out the whole sorry lot…

    A generation ahead of us and our children will pay for what is going on this country and no-one has been brought to justice for it.

  7. mick at 6:26 pm

    I don’t see how debt forgiveness will help banks. Writing off debts will not improve their balance sheets, only keep it the same (if fully provided for) or make it worse (if not). Homeowners are adults and made their own beds. Bailing them out now will result in increased risk of moral hazard and a higher probability that history will repeat itself. The free-falling house prices are a necessary market correction and will benefit future home buyers, including those who were previously priced out of the market. Any bail out will keep prices artificially high, burden taxpayers, make for a longer recession and santion the behaviour that got Ireland into this mess in the first place.

  8. Harry at 12:05 am

    Jesus Fu*king Christ, the number of selfish whinging basta*ds that post on this forum is unbelievable, with people like you lot, its no wonder the country is in the state it is.

    Well, I’ve news for you, the Thatcher/Regan neoliberal economic policy has been shown up as the great fraud that it is, the efficiency of private enterprise, liberalized trade and open markets has turned out to nothing more that naked greed and has fostered this “fu*k you, I’m OK” attitude that seems so prevalent at the moment.

    This may come as a shock to some of you but not all the people who bought houses are greedy speculating basta*ds, some of us bought houses to create secure loving homes to raise our families and spend the rest of our lives in.

    I’m lucky (so far) no negative equity and still less than a months arrears on my mortgage.

    Negative equity is only a problem if you are in ‘investor’ and are looking to sell your property for profit, however most people who bought property are (shock! horror!) not speculators. It does not matter to me if I have negative equity, I expect to stay at least 45 years in my current property, it won’t have to be sold until harneys ghost aka “fair deal” comes looking for its pound of flesh when I die to pay for my nursing home (a nice thank you for paying taxes for 80 years).

    Some people may have been naive and believed the constant steam of lies that came from politician and banks about how fantastic the Irish economy was, the how “the fundamentals are good” shite that biffo and his ilk kept spouting, the lure of 110% mortgages and reduced interest rates and grants for first time buyers

    Now if you bought some overpriced dog box expecting to move later when the family got bigger then you do have a bit of a problem but you can still pay for it and continue to live in it, however if you have a lot of arrears then you are in deep sh*t as your mortgage is a recourse loan, you can sell your home (if you can find a buyer), use the proceeds to partly pay off your lender, but the lender can peruse you for the rest of your life and probably your estate when you die. You will never be able to get another loan, get a credit card or any form of borrowing again, not unless you go to a sub-prime lender or take a credit cared with extra high interest rates, in other words you will not be able to become a contributing member of the economy.

    The economy of a country is not based on the financial institutions, it is based on the people who buy and sell services in the economy, the financial institutions are merely a means to carry out that trade, if make it so that people can’t participate in the economy then there is no point bailing out the banks.

    Brian clown has handed the keys to the countries economic policy to the IMF by committing €90 Billion (did you forget the €40B off balance sheet for NAMA) to bail out the big developers and the fat cat bankers, and that is the real reason for the IMF et al coming into this country, not the €13B shortfall in revenue. If that €90B was available to the government then the government could have used it cushion the adjustment that has to be made so that it would little or no effect on the economy. Just to put that in perspective, the expected cost of a bail out for mortgage holders is only €10B, think how much money that would release into the economy….

    The government’s first priority should be the people of the country, not the developers that fund Finna Fail, it’s no good fixing the banks if you don’t also fix the ordinary people as well.

    So as unpalatable as some of you may find it, there will have to be some sort of bail out of those with mortgage arrears, and yes it will be abused, I don’t know who it was that said that democracy is not a great form of government but it’s better than its alternatives, well the same can be said of a bail out for mortgage holders.

  9. Howard at 3:14 pm

    If you do forgive mortage debt wait till I buy a new house..

  10. pauline reid at 12:44 am

    Depends… seriously tho don’t forget people where encouraged to buy by the greedy banks during the boom, I reckon it should depend on whether they bought during the coaxing “we are all rich period” or during the “stop this madness before we go into negative equity” and also should depend on who were foolish enough to take out 100% mortgages, genuine unfortunates should be helped at the expense of the bankers and not the tax payers, thank God I am not one of those as was in the process or upgrading at the time and didn’t, (would have but legally couldn’t sell at the time) “therefore by the grace of God go I”

  11. tom brown at 10:02 am

    I now live in france and with my mortgage contract I was given 5 sheets of paper which state that I am not paying the monthly repayment. It seems that all I would have to do is sign and submit to the Bank and the month payment would not be deducted from my current account. These 5 monthly ‘none’ payments would not result in default to my contract and no repossession would result. However it is a bit like 5 strikes and you’re out ;-))

    I recall that I was not offered this at anytime whilst buying sequential ‘family homes’ over a 30 year period in Wicklow (EBS), Dublin(BOI) and Cork(AIB). My only option would have been to go cap in hand, tugging the forelock, to the ?ankers.

    This type of ‘none payment/none default’ could be made available to all in Ireland including 2nd home buyers.

    So the only descision the ?ankers have to make is how many ? and the maximum number at one period.

    Mine is 5 and can be used to suite my own circumstances
    eg pay miss pay ….. pay miss pay,etc
    or pay miss miss miss miss miss pay

    They call them ‘Jokers’ here in France, that name would need no translation, as it fits perfectly into the Irish situation.
    Is meas le mise

  12. ciaran at 2:42 am

    YES WE should
    the banks the wanks the government any other major institute automatically want US to bail them out..all these people are helping them , who is helping the major funders of the banks I say help the people and f*ck the the government funded banks people first i say

  13. Pamela at 12:23 pm

    I am sick and tired of hearing about those in “negative equity”. It is only negative equity if they are selling. If they actually bought the house to live in and not for speculation purposed, this would not matter at all.

    I have absolutely no sympathy whatsoever for those who borrowed well beyond their means as they knew what they were getting into and it was just their own greed (just like the government and the bankers) that got them into this mess. Anyone wishing to buy anything, will first look at their earnings/savings and decide if they can afford to pay back a loan and if not, will not take it out and now hope that those who lived within their means will bail them out. Why should we? I’ve always had to pay back my own debts and I’ve no intention of taking on someone elses mortgage. I’d love to move from where I am but know I cannot pay back a huge mortgage so have to stay put.

    Now, I’ll probably never be able to as I’ve had my wages cut and am now on a 3 day week because of other peoples greed. The bankers and those in government should be made accountable for the mess they caused!!

  14. Stephen at 11:08 am

    Speculators who took a chance on a second property should not be helped. However anyone who simply bought a family home and is now in trouble has to be helped. If people struggling to pay their home mortgage are not helped in some way then this country of ours will never get back on track. Its disheartening to see all the negative comments above from people unwilling to give their neighbour a helping hand.

  15. Raymond at 10:28 am

    Come push or shove yes the house is in negative equity
    well the pain has shared btwn myself and the lender period!!!!. we both take a “hair cut” i.e. debt write down 50/50. IF get employment sure i’ll handle my business okaaaaay. lame suckers

  16. Raymond at 10:17 am

    Look guys its stupidity and ignorance attacking the mortgage holders with financial difficulties. we lost our jobs and I had a reasonable 45k salary at the time with a 185k mortgage for a small property and btw not a 100% percent mortgage!!!. so its lame to say same people went out there all borrowing recklessly. we are not the bankers, developers and the FF Government that wrecked the country, so think before you stupidly go attacking and slating regular people out there.

  17. john at 9:26 am

    Yes we should provide “support” for those in Mortgage debt and support to people in negative equity. we the state has correct legistation we would not find ourselves in this mess. I feel the state is under obligation to revert the situation is some form of support. example: mortgage repayments “with no interest added” just pay the capital. This we also stimulate the most needed cash flow within the country at present and growth will then start to happen again.
    ” The state and BANKS need to stand up and show their support” this is what the country needs.

  18. Pauline at 8:43 am

    It is a very difficult situation, especially so for the law abiding people who chose not to buy at the inflated prices and stay in their rented homes.
    No, I am not for helping out those people, let the banks help them out. They (banks) are the main cause of Ireland’s financial ruin at the moment, especially so, Messrs Fitzpatrick and Drumm and to think they are have not yet been brought to justice for their misdemeanors, it is nothing short of scandalous. No, Mr Drumm is living in the States and still trying to have the luxurious life that he was so accustomed to in the past. Both are a total disgrace to the good name that Ireland lived up to for so many years, and it will take quite a while before we enjoy that again.

  19. marian at 1:00 am

    bought at height of market with a view to sell existino house however house didn’t sell so left with hugh mortgage can’t sell spend 70% of income on interest only no money off capital dont
    know how much longer can do this so any help would be fantastic

  20. Rosemary at 11:19 pm

    How about the government for the next 4 years giving tax relief on any payments made off mortgages during that time. This gives an incentive to pay off interest and capital to a level the householder can afford. This could also extended to also encourage families to support their children/ relative if they have spare cash.

    This will also bring money flow into the banks, which can then be used to keep small businesses going.

  21. Karen at 11:15 pm

    First of all for the people who are calling people STUPID.. They and we are not STUPID thank you very much, we are like every body else who bought a house with what we could efford to.. and yes I do believe some form of support should be provided for those in Mortgage debt. Like when nearly everybody in the country lost their jobs (and still are) in 2008 scary year and the banks gave them a year to provide what ever they could efford with only getting the dole. If the government didnt do that there would be houses (family homes) just left there abandoned and many more people homeless and living on the streets.. Wake up people they government and the people of Ireland should support each other and the government should come up with two plans one for the people with mortgages problems and trying to make ends meet and then another one for the people who have jobs but are still struggling to again to make ends meet.

    Be a little bit more open minded.

  22. james at 9:59 pm

    STUPID STUPID people.. The government and the banks have ripped you off in the most obvious way ever done
    The apathy is unbelievable.. get a grip ..stop the evil thieves before they ruin the future of your children…. or…. turn up the volume on the tv and hope it goes away..

  23. Inguna Brazil at 9:27 pm

    Yes,i am definetly sure, that goverment and country has to protect their people, and have to implement the debt help scheme,under the legislation that, families who are in difficulties within mortgage payments, woud be able to get effective help to dissolve this problem , and get all available support and help, to dissolve their mortgage debts.

  24. Proinias at 8:47 pm

    No, there should not be any debt forgiveness.
    Firstly, you had a choice when purchasing your home and at the price you were willing to pay for it.
    Secondly, you should know if you have the means to pay for the life time the Mortgage.
    Thirdly, you are the people that caused the house prices going way over value. And now you are disappointed that you are in negative equity.
    Fourthly, You priced the sensible people completely out of the market.

    And from all this you feel like a victim of the celtic tiger. There is no substitute for crazy spending, borrow way to much more money they you can afford. Then thinking this will last forever.
    The penalty for this is that you must pay what you agreed too and then own a house that you may never sell or never get you money back for it.

    Then People say that they had no option, but in fact if all the happy spendors and greedy money grabbers just thought for 2 seconds before purchasing a home and taking a loan that was so way over the top or paying for a home that at valued for 35K in 1998, then paying 250k for it in 2004.

    Well for that you must suffer, stupidity, vanity and ignorance have a value. It will take 35 years of your life paying a home that is only worth 20% of what you paid for, and do not forget that you are already paying twice the price of the home in just interest payments.

    Do the math, you loose anyway you look at it.

  25. Joanne Collins at 7:39 pm

    Restructuring of debt is the only thing that should be done for people in negative equity.

    I looked at my situation sensibly and even had people laughing smugly at my over cautious approach as they explained that they had two houses when really all they had was two mortgages.

    I have already taken a huge cut in my pay. By saying the people in negative equity should be given debt relief. Who is going to pay for that. I would be very annoyed if it fell on me.

    Anyone given a mortgage is an adult and must be responsible for their own actions. I think people just foolishly chose to see what they want to see.

    While I do feel sorry for anyone is negative equity

    I do not think I should suffer for their mistakes. If you are one of these people and think that I am being selfish, think about this
    if things had worked out for you and my cautious approach was the wrong one, would you have given me a free house. By asking for debts to be cleared , that is basically what you are asking for.

    I need my salary so I can live my life not bail anyone else out.

  26. maurice at 6:35 pm

    extend all mortages out to forty years or age 70 whichever comes first, condition that house holders stay in home for deuration and also life cover taken out to cover outstanding amount

  27. peadar at 6:32 pm

    The no camp dont seem to have much empathy – part of whats wrong with this country. The mortgage holders should be assisted – whats wrong with purchacing a house to have somewhere to live and call your own – God knows it took us 800 years to get to such a stage.
    Why not just double the repayment period so that the monthly rate is greatly decreased and then when the economie picks up the mortgage holders can then have this period reviewed according to their means.
    Peadar Mac

  28. john at 5:59 pm

    YES I think its about time the joe soap got help, tierd of all the big banks and goverment getting bailed out ,big builders getting bailed out . nothing for the ordinary working class, we bailed the banks out so now they should bail us out, they distroyed the construction industry, which in turn caused massive unemployment , its time for new goverment. look at the millions wasted on storage for e voting machines ? if there not getting used sell them why pay millions in storage ????? goverment again waste money left right and centre then screw the working class, they dont care if we have lost our jobs and about to loose our house ..they have there high power cars, massive wages pensions sure why do they care , were the dirt on their shoes . we need to stand up and be heard , we are now sick of getting screwed and picking up the pieces.

  29. Niall at 5:50 pm

    No bailouts to banks or mortgage holders

  30. LT at 5:28 pm

    Unfortunate – and I’m no expert by the way – but I think we all know that there is no simple asnwer to this.

    On an emotional side, I very nearly made the mistake of buying in 2008, because (like many of us) I wanted to make sure that I had some kind of security when I reach retirement. I didn’t buy thankfully, but I understand those who panic-bought. On the other hand, I see absolutely no reason why, through increased taxes, I would assist those who made errors of judgement achieve that security only to find myself without it because I now can’t afford to buy a home when property prices finally become more realistic.

    In response to Joe G’s post “I am really sorry and disappointed to see that so many respondents are still locked in that wonderful Celtic Tiger mentality of “F.U. I’m all right Jack””, I believe what most people are saying is that they didn’t fall into the (en)trap(ment) tactics of the bankers, developers and selling agents by buying huge homes with all the bells and whistles, but chose to buy modest properties that they are not necessarily happy with, OR are still renting. Surely it’s the people who bought homes in a speculative manner with mortages that allowed them to also buy the latest big 4×4 and smugly give the rest of the country a lovely 2 digit salute in the first place who had the F U attitude in the first place? And now they want those who didn’t to bail them out. They bought in a speculative way, and those who speculate on the markets should understand the risks.

    If anybody should help bail out those at risk of losing their homes it’s the deceiving politicians, the bankers and the fat cat developers. Not people on the average industrial wage or less.

    I don’t want to see anybody without a family home and a secure environment in which to grow up in. I know what that’s like. I’m all in favour of the lending institutions and developers helping them through this difficult period by restructuring their debts.

  31. Shane at 5:27 pm

    Yes we should provide “support” for those in Mortgage debt. I wouldn’t be in favour of wiping this debt at the cost of others in the country but there must be way of at least fixing interest rates at the lowest possible mark for these people. After all we do have majority shares or at the very least large shareholdings in our banks now. As shareholders we should be able to ensure those customers who were given mortgages without a sensible stress test being applied aren’t going to see their monthly repayments increase so that the officials in power at the bank can hold on to bonuses. It’s worth remembering that the domestic housing market isn’t the guilty party in this, the greatest debt default is with the business sector. The state stepped in and legislation was passed to sort out their greedy mistakes surely we can pass legislation to ensure that interest increases are not going to be the straw to break the camels back for those who just wanted a roof over their heads.

  32. Mary at 4:41 pm

    Yes I Do. If greedy banks are bailed out why not help bail out the ordinary man in the street. Most people who cannot afford their mortgages are in that position because of genuine reasons

  33. John at 4:05 pm

    I don’t see how you can support those in mortgage debt without punishing those who were prudent enough, not to put themselves in such debt. The only idea that would seem to work is restructuring the mortgage by extending its term(from 25 to perhaps 30 years) or by introducing periods in which only the interest is paid, but where ultimately the full mortgage has to be repaid at some stage.

    Remember that we(the state) virtually own most of the banks and building societies at this stage, the banks are short of capital hence the recapitalisation payments from the government, so the idea that the banks can simply just write off hundreds of millions or more, is the same as the state giving this money away, as we own these banks.

    Besides where do you draw the line ? What about individuals who borrowed money to start businesses and now find they can’t make the payments ? Do they deserve support too ? At least they were creating jobs.

    Also remember that the exchequer is borrowing heavily to make ends meet, so there is no surplus cash to pay for such support, if we do something thats going to cost millions, then we have to borrow it.

  34. Stan at 3:50 pm

    If people can’t afford their mortgages, their homes should either be repossessed or they should sell it for whatever the current market value is. In either case, any outstanding mortgage balance should be written off by the lender.

    The homeowner would then be free to either rent somewhere more appropriate to their current income or even buy again based on stricter lending criteria.

    If I can’t afford something bought on credit, whether it be a house, car etc, I know the upshot is that it will ultimately be taken away from me. To ask someone else for assistance to help me pay for my lavish lifestyle is too bonkers to comprehend.

  35. Annoyed at 3:05 pm

    Comment no.14, Colm – I totally agree with you.
    In my opinion – I feel the suggestion of means testing and the whole idea of picking and choosing people to help is the totally wrong thing to do. It would be a complete disaster.
    I do not understand people saying, ‘those people can afford to take the burden, tax them’. Nobody knows another persons circumstances. Yes people lived beyond their means and are struggling now. They do not need it rubbed in their faces or the knife twisted.
    I just hope the government are fair in the decisions they make for the 2011 budget.

  36. Svetlana at 2:50 pm

    I think the Government should think about the people for a change and help with the mortgage arrears in cases where the people have been left without jobs The problem is that even if you want to work there are no jobs available at the moment so how will you pay the mortgage if there is no place where you can work. I think the Government should have really a better social welfare system and only people who are really in need to be supported as there are loads of people that are using the system at present and it is not fair on people who have been working hard all their life to loose their homes and other to get everything served on a plate

  37. Mick at 2:46 pm

    Absolutely not. the market will prevail. other people who previously were out of the market will soon be able to afford to own a reasonably priced home.

  38. Pablo at 2:10 pm

    No way – if they were stupid enough( or scared enough) to buy a house when it was well documented that they were 20% or more over priced then they should be forced to pay their debt – I would be in favour of postponing payment for a time but the debts should be paid- capitalism works when the rules are followed – we are promoting the survival of the unfittest – a recipe for more disasters!

  39. Beverley Wilde at 1:49 pm

    I don’t wish for anyone to lose their home or be made homeless, but there is only so much that can be done. The banks (who were giving out money like sweets when it suited them) should help out with reduced interest payments etc for those genuinely struggling and maybe even the government should help out. After all, what have they done with all the stamp duty that was pouring in during the Celtic Tiger. It certainly hasn’t been spent on education or the health care system. I think that this country has been run into the ground by greedy politicians who are now creating new taxes to try and undo their mistakes. The high-ranking bank officials were in turn encouraged to promote Ireland’s boom by lending money to anyone and everyone. Needless to say it has all back-fired, but on the taxpayer not the culprits. How about slashing all these pensions payments to senior bank officials – that would help pay towards a good many mortgages for several months.

  40. Roisin at 1:48 pm

    Absolutely not!
    Why should people who did not buy a house, get into debt etc etc who are also subjected to cuts and taxes and in many cases unemployment and so on pay for other people who were irrisponsible in thier PRIVATE investments. There are thousands of people on housing waiting lists who are still in squalid at worst, insecure at best private rented accomodation or worse who cannot afford to buy a house at all. Why should those people be made to pay for other people’s PRIVATE HELD property – there in being my point. If someone wants to buy something and own it then it is up to them to come up with the resources to do so. If they cant then they will just have to do without. If I take out a loan for a car and default it will be repossessed. No different with property. There is actually quite a lot of property on the rental market to accomodate those who can no longer afford to buy the property they had initially desired. It is sad and unfortunate and will mean a real change in life style but it is the cold hard reality of over extending one self in relation to income and spending.

  41. Anthony Nagle at 1:25 pm

    The economy is the way it is because the banks lent money to stupid people trying to live beyond their means. I have my own children to support, I don’t need 200,000 more !
    Sell off the big houses and fancy cars and work out a realistic repayment plan for the debt with the bank, simple as. This is not people falling on hard times, these are people who for the most part were just downright careless.
    Like Ireland has never been in a recession before ! Have any of the people ever heard of lessons learned ?

  42. Ann at 1:22 pm

    I don’t agree with debt forgiveness. I do however believe that where genuinely necessary repayment terms should be restructured and every possible effort (other than writing-off debt) should be made by the banks to allow borrowers keep their homes.
    Interest rates should be capped for the next 2 years and those brave enough to borrow should be aided and abbetted.

  43. sara at 1:00 pm

    we could never bought a house during the boom, as we could not afford the prices without putting ourselves into ridiculous debt. now it seems we will never afford to buy a house as we will be paying for someone else’s ridiculous huge house debt.

    why is it that the people who did not buy to excessively high prices, now might have to resign themselves to live in rental accommodation for the rest of their lives so the people who did spend stupid amounts of money can keep their homes?

  44. Joe G at 12:58 pm

    There is a huge difference between helping an individual in trouble (“why should we help someone who made a stupid or reckless decision?”) and helping thousands who are in trouble. So many people are now in financial difficulties that it is a significant drag on the rest of the economy,and on every individual who did act responsibly. The Government has to show real imagination to deal with this problem (small chance that the current crowd could show any imagination)and in doing so help everyone else.
    On a negative note, I am really sorry and disappointed to see that so many respondents are still locked in that wonderful Celtic Tiger mentality of “F.U. I’m all right Jack”. I’m old enough to remember when Ireland was a caring, Christian country.

  45. Winter at 12:58 pm

    The only reason this question is being asked at all is because the government have decided to take responsibility for the banks’ debts. In effect they have transferred all this private debt into sovereign debt leaving the responsibility of paying it back to the citizens of the state. What right have they to do this? Every right as long as the citizens of this state allow them to do so. Rights are never bestowed, they are only ever fought for and won. The government have set a precedent here in relation to the transfer of private debt to sovereign debt so definitely they cannot argue against doing the same for private citizens in debt. How can we argue against bailing out private citizens if we lie down and accept bailing out the banks? As long as we take responsibility for the debts of private institutions I support the idea of taking responsibility for the debts of private citizens but I don’t support the bank bailouts. None of this matters one bit though. Until you or I get up and fight for what we really believe in, the government will do what they want and they have every right to do so. Those struggling with mortgage debt cannot expect those without debt problems to fight their fight for them but surely we all support the idea of citizens being treated better than institutions.

  46. Alan Weinrib at 12:19 pm

    A Guide to Ireland for Tourists (in case any come, you can have this ready…)

    Ireland is an island to the west of Britain and Northern Ireland is just off the mainland – not the Irish mainland, the British mainland.

    The capital of Ireland is Dublin, the Greater Dublin Area has a population of almost two million people, most of whom will be shopping in Newry on any afternoon. They travel to Newry because it is in the North of Ireland, it is not in the Eurozone, but they can still pay in Euros.

    Under the Irish constitution, the North used to be in Ireland, but a successful 30-year campaign of violence for Irish unity ensured that it is now definitely in the UK . Had the campaign lasted longer the North might now be in France.

    Belfast is the capital of Northern Ireland . It has a population of half a million, half of whom have houses in Donegal. Donegal is in the north but not in the North: it is in the South. No, not the south, the South.

    There are two parliaments in Ireland. The Dublin parliament is called the Dáil, (pronounced “Dawll”), an Irish word meaning a place where banks receive taxpayers’ money. The one in Belfast is called Stormont, an Anglo-Saxon word meaning placebo, or deliberately ineffective drug.

    Their respective jurisdictions are defined by the border, an imaginary line on the map to show fuel launderers where to dump chemical waste.

    Protestants are in favour of the border, which generates millions of pounds in smuggling for Catholics, who are opposed to it.

    Travel between the two states is complicated because Ireland is the only place in the world with two separate M1 motorways. The one in the North goes west from Belfast to avoid the south and the one in the South goes north from Dublin to avoid the price of drink.

    We have two types of democracy in Ireland. Dublin democracy works by holding a referendum and then allowing the government to judge the result. If the government thinks the result is wrong, the referendum is held again. Twice in recent years the government decided the people’s choice was wrong and ordered a new referendum.

    Belfast democracy works differently. It has a parliament with no opposition, so the government is always right. This system generates envy in many world capitals, especially Dublin, even if there is no effective opposition in Dublin.

    Ireland has three economies – northern, southern and black. Only the black economy is in the black. The other two are in the red.

    All versions of the IRA claim to be the real IRA but only one of them is the Real IRA. The North’s biggest industry is the production of IRAs. Consequently, they now have the Official, Provisional, Continuity and Real IRA. The Real IRA is by far the most popular among young graffiti writers simply because it is the easiest to spell.

    There! Ireland explained in under five minutes! Ignore the bewildered looks you will get from innocent tourists when you explain, tell them it has taken us 800 years to get a grasp of what is really going on, and just as we did, we found the country had been sold by Anglo Irish anyway.

    And no, it is not possible to explain ‘Anglo Irish’ in less a than year……unless you can can find a leprechaun named ‘Seanie’ sitting beside his huge crock of gold at the end of the rainbow.

  47. caroline maxwell at 12:18 pm

    Yes, most definitely there should be a well worked- out debt forgiveness/debt restructuring plan. It should be on a case-by-case basis to apportion support appropriately.

    Research into those who are in negative equity should be conducted to ascertain age group, employment status, number of dependents. It may emerge that a large portion are first time buyers and young couples with growing families – the future of our country.

    No one should lose their home because of debt due to situations beyond their control, for example, due to unemployment. Above all, the well being of vulnerable children and young people should be prioritized.

    With all due respect to Mr. Matthew Elderfield, we are already paying a high price as a society for the folly and greed of government, developers and financial institutions. The burden borne by those still securely employed or those fortunate enough not to carry an unpayable mortgage will become heavier anyway while the Irish economy continues its downward spiral.

    A debt forgiveness/restructuring intervention might help it to slow down while keeping people in their homes and ensuring some peace of mind while the country grapples with the appalling mistakes of decision-makers in recent years.

  48. Jackie at 12:16 pm

    Ok – restructure the loans for the short term only and then give all the sensible people who stayed within their means a bonus payment, like a couple of months mortgage – or a reduction in their interest rates – they will spend it on the economy and not try to buy bigger houses to impress the neighbours!!!! Banks and top fat cats should have to pay back some of the losses and stiffer regulations from now on.

  49. tom brown at 12:12 pm

    i can think of no circumstance in which their own created problem should be eased by others.
    on the otherhand they will still be able to exercise their vote.

  50. Patrick Cuddihy at 12:11 pm

    As the banks fell over themselves to lend money at extortionate rates in the first place; and through advertising and some offering 100% loans, which is tantamount to coercion; and as, it is now the tax paying public many of which are in negative equity because of these same banks that are bailing these same banks out, then, yes there should be a restructuring of mortgage payments. We have had NAMA for the banks, are you now against a NAMA for those who need to keep their homes? What happens if these people end up homeless, why they go on the housing lists around the country and add to the existing burden, Let Local Authorities take over the houses while the occupants are still in the houses and rent them back with a view to buy in the future at realistic market prices and like we did for banks write off the bad debt outstanding due to negative equity. And yes some of these home owners were very stupid buying into a market with imaginary money; but at the end of the day it is a government regulatory failure and greed on behalf of the banks that enticed them; but it is children that will suffer in many cases, and as we know from the past, children have suffered enough by the failures of this country’s peoples, people that should have been a bit more compassionate, so don’t lack compassion now when families need it most.

  51. alison melia at 12:10 pm

    Great comment by colm i totally agree. i work full time (so no sponging off the state) and i didnt buy a large house – it’s actually a 2 bed box for myself and my child. I didnt think at the time i was stupid buying a house as i could afford it.
    Since taking out mortgage my wages have been cut, im paying extra tax and price of everything has gone up!
    I think tax us less and get the country spending again to get more money into economy. Im not looking for debt forgiveness!
    If they tax me more on this budget i will have no choice but to get into arrears as cant afford to pay out anything extra.

  52. OT at 12:08 pm

    There should be no debt forgiveness. A more conciliatory approach and flexible repayment terms but all debt should be paid back. The banks absolutely must be forced by their majority shareholder (the Govt.) to stop going heavy on borrowers.

    There was a lot of reckless lending by the financial institutions but there was also a lot of reckless borrowing on the part of those who should have known better and could not have afforded what they borrowed in the event that rates rose or their circumstances went against them. That said everyone was encouraged to borrow and spend in every manner so there is joint culpability.

    Last year, I moved home and took on a much bigger mortgage but I can afford it. I tested my ability to pay and everyone else should have done likewise or at least should have been advised in that way. The scary thing was that AIB were prepared to loan me up to €250k on top of what I was borrowing despite what was happening in the banks and that was summer ’09!!! The loan to value ratio was 90% but we had the option to keep the home we were moving from and rent it but luckily we sold. Just for the record, I am not on superstar wages and have taken a pay cut of 20%.

  53. Caoimhe at 12:06 pm

    I think that our banks out there should look at what was done before when the intrest rates were very high. some banks if not all set a rate that was managable by cust. Where the rest of the rate balance was put aside in another account to be cleared when the rates fell. I think what banks should do is talk to the cust and maybe agree on what a cust can pay each month with that payment been made and the cust paying in extra if they have it. #The term of the morgage should be extended. Or the banks can take the house but leave the person there where that person/ family pay the banks rent each month. there is no point to take a house off a person as the house will not be sold on for the value and the bank will never get the loan back so they should just rent the property out where they will get a monthly payment rather than leaving thwe property ementy and collecting debt cos alot of people out there cant get the mortgage for a property even though the house prices have gone down but the criter has gone up.

  54. john at 12:03 pm

    Absolutely no way. If thing went the other way and they made money on their houses would they be trying to give it back to us. I dont think so. Why should I pay for their mistakes.

  55. Jonathan at 11:59 am

    Yes we should forgive the debt. Instead of paying all this money to bail out the banks we should forgive the negative equity and some of the debt. The Government should give the money to the negative equity mortgage holders which they in turn repay to the bank. The bank effectively gets the cash, their losses are reduced and the negative equity mortgage holder is put back in a more affordable situation. The money should come it at the bottom and filter its way to the top not the other way around.

  56. Colin Murphy at 11:58 am

    From my experience and I can only base my response on that, I would suggest that while large scale enforced debt forgiveness is a laudable idea it is really a square wheel.

    Negative equity and mortgage payments get all the headlines but the real problem faced by most people is that their net monthly income is less than the amount of money they have to pay out every month.

    Ok I may be a bit facetious in suggesting something so simple but that is literally where it lies.

    Most people are not equipped from an
    educational or emotional point of view to deal with the reality that they have less every month than they owe.

    More often than not in a partnership, one or both partners are dealing on their own with their own personal feelings and issues regarding loss of income, employment and/or feelings of failure.

    There is an inability to deal with the psychological impact of the losses facing us personally. Adding to that, the mortgage while taking up a huge percentage of the income is only one piece of the problem.

    There is debt to credit cards,car finance, credit cards, utilities, credit cards, personal loans,
    credit cards, store cards and the lenders chasing these debts are like a certain news broadcaster, they call on the hour every hour. The stress
    of these calls alone drive people to take actions that otherwise they would not.

    From reading some of the responses it is patently obvious that the Irish Lobster is alive and well, in that you will be dragged down when you get above yourself and pushed down further when you finally fall back into the water.

    As it stands most people have one asset and that is the home that they live in. In a lot of circumstances it is probably worth less than
    the amount owed on the mortgage and it is usually worth less than the amount owed in totality by the household.

    So why not leverage all of the debt against the asset and reschedule all of the outstanding debt
    into one payment at a fixed mortgage rate of say 5% over an agreed period until such time as the debt is cleared.

    If a credit card is charging 21% and an overdraft is charging 12% and a credit union is charging 13% then surely they can write down a percentage on a debt that they may currently never get repaid and have it securitised onto an asset. Or if they are not willing to write it down, accept a reduced rate on the basis that the debt is now secured.

    The rationale behind charging high interest rates on unsecured borrowing is that it is just that, unsecured.

    If a household has one payment due every month, it may be easier to find the money to pay for that than the current loaves and fishes method
    used currently. If you have a pain in your back, your head, your leg and your nose you don’t go to four different doctors for pain relief yet
    that is just what is happening now for people in debt, when they have a pain in the head they go to the head doctor and take the medicine until
    it doesn’t hurt as much, it doesn’t mean it is better. Then the back pain starts so it is to a new doctor and a different medicine. If one doctor was dealing with all of the aches and pains then there is a better chance of patient survival no matter what the ailment.

    Ok, so the existing security holder takes an initial hit but the household now has one creditor and if stringent checks and balances are
    put in place to ensure future borrowing does not occur or garnishee orders are place then it may avoid mass repossessions which are sure to
    occur if some solution is not found and may go some way to prevent the type of serial borrowing that occurred in the past.

    The hardest part to a solution like that is getting the mortgage holder to dilute their security but it avoids the moral hazard argument, there are no large scale forced writedowns and everybody gets at least one last chance.

    So the individual is not too big to fail but a solution must be found before the domino effect of mass repossessions kicks in.

  57. Jan at 11:56 am

    Tricky one this. One the one hand the banks who caused this chaos are getting off with their bail outs etc. I think they should liase with debtors to agree a repayment that is suitable but the minute circumstances change then normal repayments should recommence. No one wants to see families put out of their homes. Increase the term length until the mortgage is paid in full even if this brings them into old age.

    The banks need funds to function and and if homeowners are “let off” then there is less money to go around and we all suffer.

    We have had to make drastic changes to out lives to pay our bills and mortgage so should everyone else who find themselves in trouble. Can some of their dole be withheld to pay their bills instead of just handing it over. Some people are just naturally bad with money

  58. Bob at 11:56 am

    Why should I help bail people out? We bought our house in the height of the property boom… we stayed within our budget so that when kids came along and 1 of us wanted to stay home, we could still afford to live on one wage. We didn’t try to live beyond our means at all…now, we struggle because 2 kids have come along, we both work, have to pay creche fees etc. Why should we be penalized because other people spent way too much money to begin with!!!

  59. Gil at 11:55 am

    Difficult one – the banks have been bailed out, so why shouldnt the individual be bailed out?

    BUT there are people who have maintained reasonable lifestyles, worked hard and lived within their means and are managing things as best they can – as Matt Elderfield said – “the cost of any support will be borne by those neighbours who avoided excessive borrowing themselves or are gritting their teeth and meeting their obligations”. I am one of those. I’m living in a small house, in a nice enough area. i did my “worst case scenarios” on my mortgage payments before even considering buying – for instance unemployment and increased interest rates. I am now unemployed, and i am surviving. My personal stress testing worked for me. There is no way any individual could confidently say that in anticipating their worst case scenario they can service payments for a €400k or above mortgage – yet they still embarked on them. I think people failed to see that they would have to service a 30 year mortgage, for 30 years! I really think it is awful that people are in the situation they are in – but there has to be some level of responsibility. We cannot go and live beyond our means, and not suffer the consequences. I would be distraught if i thought my good sense and will power against living beyond my means would work against me and leave me striving as hard as i can when others sail through with bail outs. there are lessons to be learnt.
    Moratoriums, mortgage holidays, reduced interest rates and interest only options are the way forward – the cost borrowed should be ultimately born by those responsible for borrowing it.

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  61. Sickofit at 11:54 am

    Absolutely NOT…….How would you determine who truly was caught and who gambled to get richer. How many people re-mortgaged the main home to buy that nest egg second home…. Would they share the profit with the rest of us if things turned out differently. I don’t think so..

    I see this morning in the papers that most of the current repossession are on loans taken out in 2006 – 2008, The facts of our pending demise were in the public domain at that stage and these people CHOOSE to take a change, I’m afraid, I cannot support these people who preferred to gamble.

    I won’t pay someone else’s LARGE mortgage when I spent the last 8 years living & SAVING in a house which was not desirable or suitable for my family so I could afford a HOME when this crash arrived…

  62. Dragutin at 11:52 am

    I do not see why homeowners that paid 500,000 euros for their homes should be favored over those that paid 240,000, just because now they do not have the money to pay up.

    Any “forgiveness” and/or “relief” should come across the board for everyone, in a fair, “democratic” fashion, where the poor and the rich are treated equally.

    If even that is not enough: oh well, nobody forced some of us to bite more then they could chew.

  63. Niall at 11:48 am

    Absolutely not! When we took out our morgage we did it on the basis that if one of us lost our job (which has happened) we could still pay the morgage. We didn’t assume we would both got enormous raises for the rest of our lives and that property prices would continue to soar. Restructure loans fine – make me pay for other peoples greed and stupidiy – no thanks.

  64. smcgroar at 11:47 am

    i didn’t buy a house for silly money, neither did my wife or daughter. why should they receive any assistance for being stupid. stupid is as stupid does!

  65. Colm at 11:47 am

    The problem is any attempt to support those in distress means we are supporting those who, often through no fault of their own, are not contributing financially to the economy. They have most likely lost their jobs and are living on the money provided by social welfare. Relieving their debt will do nothing to get the economy growing because they are not in a position to spend.

    I thought the ESRI report on a property tax last week was an interesting and somewhat disturbing snapshot into what is wrong in the economy. They calculated up what a property tax would need to raise. Then they divided it among the number of house holds. Then they said a certain % would not be able to pay a tax as they are on social welfare, pensions etc. But instead of just eliminating that portion of the tax burden they transferred it to those who can pay in order to meet the overall tax target. The end result is those unfortunate enough to still have a job have to pick up the tab for their unemployed neighbours.

    It demonstrates an attitude among our current regime that the middle classes are there to carry the burden for everything. It’s getting close to the point where we may as well nationalise work and just have our salaries paid straight to the revenue.

    If there is to be any form of debt forgiveness it needs to be applied to everyone not just those in distress. If you want to kick start the economy then cap mortgage interest rates at say 1% for 2 years for everyone. That will help those who have no money and are currently struggling under 5-6% rates from their banks. It won’t solve their problem but it will stabilise the hole they are in. The key thing is it will free up money with the employed middle classes who can then start spending again and kick start the economy moving.

    The alternative is to continue to flog the employed taxpayer to death and drive them to a position where emmigration or the dole are better options to staying here and paying crippling taxes to keep others in a lifestyle you can only aspire to.

  66. Billy at 11:46 am

    I am fed up hearing about people who are in debt because of ‘bad advise’. Have they no brains. Are they all a bunch of lemmings. I could have got a mortgage for 400,000 but I didn’t. People were and are livng far beyond their means. Why should I help bail out their stupidity. They wanted the big grand houses. It is because of them that house prices ended up so high. They were only too willing to pay over the odds. By all means help them with interest only payments or breaks from payments. But not one cent of other peoples money (which includes taxes)should go to paying their mortgage off.

  67. Anna Farrell at 11:45 am

    I think the Government and the High earning Bankers, as well as those shysters like Sean Fitzpatrick, Drumm etc. should help these people with mortgage debt. It is an absolute disgrace, they are off playing their rounds of Golf in the highest fee paying Clubs and back in the Club for drinks with the Boys. These guys should pay as they are responsible for the way this country is today. Dining in the Shelbourne, L’Ecrivan, Dobbins at a whim, I don’t own a property and live in rented accommodation and I am finding it hard to make ends meet as it is without forking out any more of my hard earned money (which is not much with levies already taken) from my salary. It is an absolute disgrace, people losing their homes. I am livid and God only knows what this December Budget will do to people like them and me.
    Anna Farrell

  68. Lisa at 11:42 am

    No it would encourage more people to fall behind in their repayments. Furthermore, we chose to wait before buying a property, why should we pay for those who borrowed excessive amounts.

  69. Daniel at 11:39 am

    As always it is the people who meet their repayments and are cutting down to ensure their debts are paid so the people who cant control their money get off scott free. Im getting sick of seeing people who dont work or are living on single mothers allowance and they have more money to spend than I do, an honest worker who pays his mortgage and bills (struggles to do so)…. Whats ever going to be done for the honest folk?????

  70. Darren Gilbert at 11:38 am

    Why should people who could not afford a house in the good times help pay the debt of those who could afford, speculated, and invested in the property scam – sorry market – over the last 20 years?

    As much as the people and tax payer should not be bailing out the large developers and bankers and their debts, those without a house should not be forced to help pay the mortgage of those with a house.

    You took the risk – you pay the price!

  71. Karen at 11:37 am

    Maybe I am being biast as I am one of these 200,000 people so of course I am going to agree with it. It’s disgusting! We go without eating at times to ensure our mortgage is paid and even at that bills and everything else on top of that are always paid late. Its sickening, depressing, and any little help big or small I know would be hugely appreciated by me for one and without a doubt anyone else in the same boat as me which less face it, is slowly sinking! A home is a home which we are very grateful for however surely there are some good aspects about being a home owner to look forward too. I will patiently await.

  72. Eleanor Kelly at 11:36 am

    Do not think we have any choice in this one!

  73. Darren at 11:35 am

    I get little enough in this country for the taxes I pay already and have chosen to save while renting over the past 10 years instead of buying an overpriced box.
    I would seriously consider leaving the county if I am expected to pay for other people’s greed and/or naivety. I realise that some are in the unfortunate position of having lost their jobs, and I sympathise with them, but those that were prudent should not be asked to bail them out.

  74. David O’Keeffe at 11:34 am

    I feel it should be across the board and not just people that cannot afford it. People in negative equity should be hlped out to get out of this. As teh banks are bailed out so should the people that are in neagative equity.

  75. Noel Lawlor at 11:33 am

    I think we should provide support for those in mortgage debt, however, this support should only be in the form of interest only payments or a break from repayments for a period of time.

    At no point should personal mortgage holders be ‘rescued’ from their mortgage. Everybody knew the risks associated with taking out a mortgage in the past. If we remove or forgive the debt, it will only promote greater risk taking in future; not to mention the inequality of punishing those who choose carefully and lessoned their risk by buying smaller homes.

  76. Tracy Muller at 11:30 am

    Yes we should have some form of debt forgiveness. The negative equity shared between banks and home owners.

  77. david at 11:28 am

    no why should we they took out the loan so they should pay the full amount back

  78. FlexBrowne at 11:26 am

    By all means, restructure debt so it’s manageable in the short term. Banks and other Financial institutions exist to make profit, not provide care and a warm hug when things go bad. bad decisions haunt people but bad advice and a crooked corrupt government and a greedy profit obsessed property sector didn’t help. Nobody should lose their home if they’re trying their best to make ends meet, but if you write off any of the debt, it could open the floodgates of bad debt across the sector and beyond……

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