Hmmmm…. good news for all as Ireland can resume its main and most valuable export, population for the colonies of the British Commonwealth.

http://www.news.com.au/couriermail/story/0,23739,26690633-3102,00.html

Jobs, jobs jobs …… pumping out coal, soon to become CO2 in China.

I hope that they do not leave behind too many negative equity debts….

Housing
Just because the UN says we have a right to housing does not mean it can be inordinately at the expense of one sector of society. We have more houses than we need. So what is the problem? One created by lending!!!!

WE have what we wanted, enough housing for all!!! There is no problem just the challenge of who is to lose more money. This is a legal problem. It should be easily settled if we had a decent justice system. Do we? Are we giving bond holders good money for nothing?

“Lucey has a PhD so his figure of “€75 billion outstanding in residential mortgages” must be right, no?”

Looking at the breakdown of the Central Bank figures here (sept ‘09) http://www.centralbank.ie/data/MonthStatFiles/Breakdown%20of%20Outstanding%20Residential%20Mortgages%20-%20Sep%202009.xls
The total of mortgages for principle dwellings is €78.6bn. Perhaps Brian, armed with his Phd, extrapolated the figure to end dec and arrived at €75bn?

After all, I’m pretty sure that any legislation would only be for mortgages on principle dwellings, so the €147bn would not be accurate to use in this case..

http://www.thepropertypin.com/viewtopic.php?f=4&t=28001

Since I only have a Masters degree I must be wrong about the Central Bank monthly statistics showing that outstanding residential mortgages in December 2009 were €147.6 billion.

Lucey has a PhD so his figure of “€75 billion outstanding in residential mortgages” must be right, no?

Second, even if you accept that “society” exists, you can argue that society has a duty of care to keep people from starving, from living on the street, from having no access to healthcare and education without agreeing that society has a duty of care to take some people’s money to keep other people living in houses that they are not paying for.

In essence society has the same duty of care to those who overborrowed as it owes to everyone, as mentioned above. Those who overborrowed are not entitled to special treatment.

The claim that “it’s not their fault” is true in some cases, and it’s sad. Some have been simply unfortunate, hadn’t overborrowed and still lost their jobs and incomes. That always happened and will continue to happen in the future and it is really unfortunate for those people.

The question you seem to be asking here is whether we should be unusually generous with those who did overborrow and who were - by any sensible measure - imprudent. My answer? No. If this seems to lack compassion for these people, it doesn’t. What is is, is compassionate to those who would be asked to pay the bill. These people have somehow become invisible in the debate. They should not be.

Anglo is one case. A mortgage bailout where value is transferred from the aspiring house buyer to the current house “owner” would be another.

The Central Bank monthly statistics show that outstanding residential mortgages in December 2009 were €147.6 billion. (€109.9 billion regular + securitised mortgages).

Where does the €75 billion figure come from?

True. Nor is it my responsibility to indemnify a totally corrupt and reckless Anglo. However I have been given no choice by the current Govt.

Surely the Govt has a role, be it active or inactive.
Because the Govt and the citizenry will face the consequences of a particular action or inaction.
At a minimum the mortgage interest relief for negative equity, which has already happened.

Looking at it from afar, it seems that they are on a go slow in recognising the full extent of our national situation, and until they end this ‘work to rule’ all actions will be half assed as they wont take off the blinkers.

Al

It’s perfectly reasonable to suggest that the impact of a fall in house prices is an increase in utility to buyers of the same size as the decrease in utility to sellers. It’s true that the loss in utility to the seller is very easily identified - particularly in the case of negative equity - but that’s not the same as saying the loss for one is bigger than the gain to the other.

In any case it’s important to state that it’s not the moral responsibility of potential house buyers to indemnify excessively indebted house “owners” against the consequences of their bad decisions, nor is it reasonable for the state to mandate such an indemnification.

Just as it is not Microsoft’s or Exxon’s or CRH’s responsibility to indemnify Bernard McNamara against the consequences of his debts, it is not the responsibility of today’s unmortgaged house owner, nor today’s college leaver, or today’s renter to pay for today’s non-paying mortgage holder.

I did qualify the jingle mail with “easier”. My view is that best efforts should be made for banks and borrowers to resolve their problems. I think it would be helpful to marginally strenghten the borrowers hand.

Realistically, a large majority of distressed debt should go to foreclosure. Only a small portion of debt will become affordable by restructuring.

Equally, I’m not convinced that the government should play any role.

How many mortgages holders will end up facing more limited choices with childcare, university for the kids, cars, home improvements, etc
where the stress of the mortgage impacts on all these choices, and ultimately the surrounding economy.

Wouldnt it be more factual to state that consumer spending is ‘diverted’ to mortagage payments, as opposed to characterising it as a national decrease, especially with deductions in wages.

Wont this depress the national economy for the next X amount of years?
X =31 of my years, anyway!

Al

Er, if I’ve caused any offence then it wasn’t intentional. Apologies.

That was the nature of the Australian stimulus package. They literally sent out money to people on the records at the rate of $900 a time, if in receipt of social welfare. And if students! There was an appreciable multiplier effect. Total cost of that ang building stuff at every school in the commonwealth: $40Bn.

But Ireland can’t afford it…..

“so don’t crucify me”

Please, no anti??????? or racist remarks here….

Ouch. Remind me not to cross you this afternoon

I also meant to say….. I was also advocating last spring that instead of the government throwing tens of billions into the banks over the coming years (I’m starting to think that I’m a prophet) why don’t they just divvy it up between every head of household in the land and tell them to use it to pay off mortgages and other debt (or spend it into the economy if they don’t have any). I’m sure that would have worked but it’s just a bit too ‘outside the box’ I guess. Maybe not even in the same room as the box.

US situation. Many state there have non-recourse mortgages, ie the security is the house. . Period. . . No sue the borrower. Especially in view of reckless lending, where the borrower may try suing the lender!!! but that could never apply to Ireland where the banks only lend sensibly. The suit often succeeds if the mortgage agent is deemed to be ana gent of the lender, and acts fraudulently.

Irish banks usually insist on insurance whn lending over 80% ltv. They can recover against the insurance company which can then pursue Sean P Citizen for the costs etc.

Just a question. Is that true? Surely the bank sells the repossessed property and then the (previous) owner is still liable for the difference between the sale price and the outstanding mortgage……… which the bank will make look like another, smaller, loan on their books ……and the old mortgage has been ‘cleared’? Surely all it takes is just another sleight of hand accounting trick to not make it look like a loss?

Not sure - I’m no accountant so don’t crucify me if I’ve got that wrong. I would have thought repossession and sale, with the mortgage holder having to pick up the tab for the difference, is a no lose situation for the banks?

http://josephmorgan.blogsome.com/2009/09/05/aftershock/

I’ve also just finished editing a radio programme about this subject (Ronan Lyons - hat tip - is one of the contributors - along with Joan Burton TD, Noeleen Blackwell from FLAC and contributions from Focus Ireland and halfaloaf.ie) ….. I’ve just got to find someone to air in now!

And then…… as Brian rightly points out…… there’s the whole mess that is unsecured lending for all those credit cards/cars/holidays/etc.

Tips of icebergs and all that.

http://www.news.com.au/couriermail/story/0,23739,26672283-952,00.html

In theory we should be looking to fix interest rates long-term for large swathes of people while rates are low. The problem is that the ARMs, particularly low margin trackers, are currently way lower than long-term rates and with the best will in the world many people can’t afford long-term rates.

I think some for of long-term fixing combined with principal reduction so the monthly payment only goes up a bit, but is then fixed for ten or twenty years might have legs (in that the short-term boost to interest revenue would make up for the loss in principal).

I can’t see that a change to non-recourse mortgages (allowing jingle mail) for existing mortgages would do anything other than bust all the banks (including the one that isn’t bust yet), much as I favour such a move for new mortgages (or a move to CoCos or partial recourse) for the future.

I believe we need to get to a point where we no longer have a reliance on bond markets for day-to-day spending as soon as possible. If we get to that point, we will be in a better position to implement policy without being, eh, exogenised.

How this is to be achieved by keeping the banks afloat is a mystery to me (wrapped in an enigma). At some point when you are holed below the waterline, you may have to turn the pumps off and let the ship sink. In which case an orderly lifeboat plan and rescue ships are called for. I don’t believe the seriousness of the situation we are still in is yet realised.