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Can't pay your mortgage? Your council should do it for you...

Whatever action the government takes on Ireland’s housing debt crisis will be the ‘biggest political decision since Irish Water’ according to a householders’ group.

THE SUGGESTION THAT local councils should supplement distressed mortgages is just one of many being made by homeowner’s body the Irish Mortgage Holders Organisation (IMHO) in order to ease Ireland’s housing arrears crisis.

The organisation has proposed a number of reforms in a six-page submission to the Department of Finance, a copy of which has been seen by TheJournal.ie.

Currently, there are 37,778 cases of mortgages in arrears of greater than two years across Ireland.

excerpt from the submission The IMHO submission made to Michael Noonan

Most of the measures proposed to combat Ireland’s debt crisis have stagnated at best, with the courts currently receiving an average of 800 repossession proceedings into the system on a monthly basis on top of the 8,000 that are already outstanding.

From this point of view, the IMHO’s submission to Michael Noonan contains three proposals that they say will kickstart the fight against mortgage insolvency:

  1. That split arrears mortgages be introduced involving local authorities – so of a monthly repayment of say €750 the local council might pay €450 – this is justified as being some distance less than the rent supplement a council would have to pay if the borrowers ended up in social housing.
  2. Replacing the current Mortgage-to-Rent (MTR) scheme with a Mortgage-to-Lease (MTL) scheme. The original scheme has been in place for three years but has only seen take-up of about one tenth the volume expected. That scheme is so ‘riven with bureaucracy’ that no-one will go for it. The MTL scheme would remove much of MTR’s red tape and bring upwards of 1,000 unsustainable mortgages back from the brink.
  3. Reform of Ireland’s insolvency rules. Particulars here include reducing the involvement of the courts, the waiving of VAT, and the reduction of the term of bankruptcy from three years to one. 

Allied irish banks helping with Mortgages Crisis IMHO director David Hall Sasko Lazarov / Photocall Ireland Sasko Lazarov / Photocall Ireland / Photocall Ireland

A ‘cluster cock up’

Speaking to TheJournal.ie, David Hall, director of the IMHO, describes the Irish government’s efforts to alleviate the crisis as ‘the greatest cluster cock up ever’.

“It’s actually quite an achievement to make such a mess of things,” he says.

The four cornerstones, they being mortgage resolution targets (MART), insolvency, reducing bankruptcy from 12 to 3 years, and the MTR scheme – they’ve all failed utterly.
That’s what happens when you get housing agencies and bankers to design such a system and don’t consult the people who are actually experiencing adversity – it couldn’t be more dysfunctional.
As for MTR, when you have myself and bankers in agreement you know you’re dealing with an unmitigated disaster.

When asked how he sees his proposals faring with Michael Noonan, Hall suggests things are starting to move very quickly, although whatever solutions the government come up with will be fueled by a lot of different stakeholders.

“One thing you know is that this is urgent – we met with finance two weeks ago and we were given a week to get our proposals through,” he says.

There’s an election on the way – whatever announcement is made on this is going to be huge politically, easily as big as Irish Water.
There’s a couple of hundred thousand people affected by this across the country who’ve had to listen to lies saying they ‘can pay, won’t pay’ for too long.
Whatever decision is made, at least it will finally take those in crisis out of the limboland they’ve been living in for years now.

Read: Our banks are making homeowners ‘pay way over the odds’

Read: The economy is growing fast, but things look bleak for renters

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56 Comments
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    Mute Ivon Itchie Saq
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    Apr 8th 2015, 12:25 PM

    I think we are already paying enough for other people’s debt I’m not in favor of paying more and putting myself into more debt

    375
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    Mute OggieThe4th
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    Apr 8th 2015, 12:32 PM

    You won’t have any say in it #truth

    38
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    Mute Alan McLoughlin
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    Apr 8th 2015, 12:52 PM

    Green thumb, simply for your name!

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    Mute William Boyd
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    Apr 8th 2015, 12:53 PM

    The self righteous “I’m alright Jacks” will be allover this article like a rash, a bit early for the popcorn so I think I’ll just pop the kettle on instead.

    53
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    Mute Sara Davis
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    Apr 8th 2015, 12:48 PM

    We can’t get a mortgage so are stuck renting. Why should my taxes subsidise other people’s mortgages? I feel sorry for them but mortgage holders aren’t the only ones in need of a helping hand.

    342
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    Mute Scarr
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    Apr 8th 2015, 12:53 PM

    Your taxes shouldn’t be doing a lot of things, but they are.
    A solution has to be found for the mortgage situation. Turfing everyone out isn’t a runner – so what’s the alternative?

    65
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    Mute Egg Head
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    Apr 8th 2015, 1:21 PM

    Why isn’t turfing everyone out a runner? Introduce a policy whereby anyone in arrears who surrenders their home to the bank will be granted forgiveness on outstanding mortgage related debt and they can start over. This would be beneficial because 1) it could be used as precedent to make all new mortgage issuances non-recourse which allows for a more efficient property market. 2) it releases current occupiers from unsustainable debts without having to endure bankruptcy proceedings 3) it gets the property market working properly again, with price discrimination for all, not just for those under 30.
    The only thing that really isn’t a runner is allowing people remain in homes they are demonstrably unable to afford.

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    Mute Lisa Reilly
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    Apr 8th 2015, 1:44 PM

    I think the only reason this hasn’t happened is cos there’s nowhere to house these 40,000 families.

    64
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    Mute hard yaka
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    Apr 8th 2015, 1:56 PM

    The real question is if you can afford a mortgage but can’t get a house where you want why should someone be allowed live in that area and not pay their mortgage.

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    Mute Frederick Constant
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    Apr 8th 2015, 2:18 PM

    Is this for real? And where will that money magically come from? Fine if it means sacking some of the many useless bods in Councils all over the country, but otherwise, eh, how?

    60
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    Mute Egg Head
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    Apr 8th 2015, 12:30 PM

    And if you can’t pay your rent local councils should, and often do, provide park benches as alternative accommodation. Why is it that people who managed to borrow money from a bank once upon a time are afforded more rights & security than those that didn’t excessively indebt themselves in this country?

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    Mute Scarr
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    Apr 8th 2015, 12:44 PM

    You’re not making any sense to me. Maybe it’s the sun. How are indebted people, who now cannot afford their home, provided with more rights than you exactly?

    40
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    Mute Egg Head
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    Apr 8th 2015, 12:46 PM

    People who haven’t paid a mortgage payment for two years are still in situ in their homes, miss a single rental payment an you’ll be evicted. Is that equitable?

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    Mute Scarr
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    Apr 8th 2015, 12:50 PM

    Sorry, I missed the rent part in your opening sentence.

    28
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    Mute Kal Ipers
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    Apr 8th 2015, 1:25 PM

    Obviously unaware how difficult it is to evict somebody. Very unlikely to get paid the rent after the time either

    34
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    Mute Thomas Mac
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    Apr 8th 2015, 2:27 PM

    Homeowners have put huge deposits down on their homes .How much of a deposit has a renter put down ?

    25
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    Mute OggieThe4th
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    Apr 8th 2015, 2:42 PM

    Ah Thomas ,don’t upset them with facts .Haven’t you heard ? They don’t like being hit with them :)

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    Mute Neal Ireland Hello
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    Apr 8th 2015, 2:45 PM

    People forget that somebody can be two years in arrears and still be making a full payment every month. They just are unable to close the two-year gap from a previous spell of unemployment, despite having returned to a steady income Helping those people in some way makes more sense than ignoring the problem.

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    Mute Kal Ipers
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    Apr 8th 2015, 3:57 PM

    @neal
    That is possible but I doubt it is the standard or even common. If that is the case you go talk to the bank and arrange new payment terms. The suggestion is not to pay peoples arrears this way but for those not currently paying.
    How this suggestion anyway possible or fair is beyond me. After paying my property tax in Dublin a chunk is given to other councils with their residents paying less property tax. Then the council uses this money to fund their residents’ mortgages. Then I also have people commuting in cars from these areas causing traffic congestion and pollution where I live and they pay less property tax.
    Pay for your own property and councils get your residents to pay for your services

    14
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    Mute Anthony Lang
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    Apr 8th 2015, 4:21 PM

    Kal Ipers, it is not all about you.

    It is about working out practical solutions which do not leave 37,000 families homeless.

    What happens if the banks are allowed to dump 37,000 households on to a housing list which is predicted to stay at 100,000 waiting list until before new social housing comes on stream, all going well.

    The problem should not have happened, but it has happened and solutions need to be found.

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    Mute Kal Ipers
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    Apr 8th 2015, 5:32 PM

    @lang
    Why are all the properties in trouble considered to be full with families? Not having a property you own does not make you homeless. Not owning a property doesn’t mean the state has to house you.
    So if you remove your exaggerations how bad is it? By keeping in the property you restrict supply increasing prices for people able to afford them. Paying further tax money to keep that the case is foolish. Nothing to do with me at all. I can afford what I bought.

    19
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    Mute Kieran OKeeffe
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    Apr 8th 2015, 12:10 PM

    8 yrs into the crisis..once and for all the govt should stop kicking the can down the road..deal with it..letting the banks act as their own watchdogs isn’t working..and tackle the variable rates as well..help people holding on by fingertips

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    Mute Enda Ireland
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    Apr 8th 2015, 12:51 PM
    53
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    Mute Chris Mansfield
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    Apr 8th 2015, 1:42 PM

    I assume councils would end up with an equity share in the house for handing over that money.

    Silly me.

    92
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    Mute Drew
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    Apr 8th 2015, 12:37 PM

    Aye, biggest political decision since Irish water…

    That sounds about right, can’t someone else will pay for my Water supply… yes?

    Oh and my mortgage too… Can’t pay won’t pay don’t ya know! Gimme gimme gimme!

    78
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    Mute Scarr
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    Apr 8th 2015, 12:46 PM

    You seem sophisticated.

    31
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    Mute Jake Race
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    Apr 8th 2015, 5:08 PM

    I also want to live life as a scab. Bring on the welfare state!

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    Mute whynotme
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    Apr 8th 2015, 8:12 PM

    Is it true that 70-80% of people that are in trouble with their mortgage are in employment ?

    6
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    Mute Paul Dunne
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    Apr 8th 2015, 1:56 PM

    sweet Jesus does nobody wants to pay for anything in this country.

    56
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    Mute james r
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    Apr 8th 2015, 12:22 PM

    Clear the debt start from scratch .. Government s have done it for the banks now do it for the people it would free up billions pumped into the economy’s ..

    55
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    Mute Scarr
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    Apr 8th 2015, 12:45 PM

    Won’t work. Bank shares would tank.

    46
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    Mute Stephen Byrne
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    Apr 8th 2015, 1:03 PM

    Clear all peoples debt? Why would any financial institution ever grant a mortgage again if all will be dismissed?

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    Mute Lisa Reilly
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    Apr 8th 2015, 1:42 PM

    There’s well over 500,000 mortgages in Ireland, the number of those in long term arrears is around 40,000. If we clear the debt for those 40,000, plenty of people will just stop paying their mortgages if there are no repercussions. Where do those people go then? Do they keep the house?!
    If they need to move where do they go? If they can’t afford to make *any* mortgage payments then they probably won’t be able to afford a deposit and rent at current market rates.

    61
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    Mute Jake Race
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    Apr 8th 2015, 2:45 PM

    “Can’t pay your mortgage? Your council should do it for you”

    Let me rephrase that for you:

    Can’t pay your mortgage? EVERYONE ELSE should pay it for you.

    53
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    Mute rory conway
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    Apr 8th 2015, 1:42 PM

    Negative equity does not count until you are trying to sell. Aided by reckless lending people borrowed more than they should have. However , none of this justifies tax euros being used to bail out people.

    51
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    Mute Thomas Maher
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    Apr 8th 2015, 12:35 PM

    As a short term solution I think this would help a lot of people. Maybe given the families the equivalent of the max of the rent allowance in this crippling situation for 2 maybe 3 years depending. So as to give a hand up to get back on their feet. The idea make sense in that it will cost a lot less than finding and paying for alternative accommodation. Plus there is the added benefit that in will reduce pressure on housing waiting lists.

    But the idea of making it a long term absolutely out of the question.

    47
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    Mute @mdmak33
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    Apr 8th 2015, 12:17 PM

    Government do not care, get rid of them. Mass nonpayment and a no vote in endas referendums if still there will force a GE,guaranteed. They have to be removed.

    46
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    Mute Neal Ireland Hello
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    Apr 8th 2015, 12:23 PM

    And then we’ll all live happily ever after?

    92
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    Mute Life in no motion
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    Apr 8th 2015, 12:33 PM

    So you’d vote no in equality referendum just to spite enda?

    *facepalm*

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    Mute Thierry Ratt
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    Apr 8th 2015, 1:45 PM

    No mention of banks putting mortgage variable rates in line with Europe, but when water charges are mentioned “we are the only country not water metered in Europe”.

    37
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    Mute Tom
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    Apr 8th 2015, 5:37 PM

    A formet gay work college voted no in the children’s and Oireachtas enquiry referendums to send a message. To spite him I told him I was voting No to this one to “send the government a. (Obviously I am voting Yes, I am actually canvassing. )
    He was aghast. He told me this was too important. I told him the children’s referendum was important.

    10
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    Mute Chris D
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    Apr 8th 2015, 1:26 PM

    Hilarious. the councils have enough problems (that they cant sort out) with their Shared Ownership mortgages. These mortgages are never included in the figures either. Over 30% were in arrears last time I checked and there has been PQ after PQ with the can being kicked down the road for 3 years so far and counting.

    38
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    Mute ColindeB
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    Apr 8th 2015, 5:48 PM

    I have a radical solution for this problem.

    If you can’t afford the house you are living in, you move to one you can afford.

    34
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    Mute Tom
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    Apr 8th 2015, 5:33 PM

    When are people going to learn that councils and governments don’t have money other than tax money? What this is is merely a request to the taxpayer to stump up.

    33
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    Mute Wacky Races
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    Apr 8th 2015, 5:19 PM

    Or how about people learn from their mistakes and suck it up and not expect everyone else to sort out their problems

    26
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    Mute Darren Norris
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    Apr 8th 2015, 4:06 PM

    Insane comments, that organisation should be shut down immediately for such a crack pot press release.

    they should be made relocate asap into more affordable accommodation in order to get the property sector moving again,

    22
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    Mute Mick McGuinness
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    Apr 8th 2015, 12:46 PM

    The mortgage crisis has nothing to do with the referendum so why as people to vote “NO” it doesn’t make sense. A stupid statement for anyone to make just because they don’t like Enda & Co. Simple answer is don’t vote for them in any elections coming up I’m the next year.

    19
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    Mute Witszend
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    Apr 8th 2015, 2:26 PM

    What are David Hall credentials, a former FF hack is all I see, spending other peoples money.

    18
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    Mute patjoejoe123
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    Apr 8th 2015, 12:59 PM

    thats my laugh for the day sorted :D

    17
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    Mute Thomas Mac
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    Apr 8th 2015, 1:04 PM

    Why?

    13
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    Mute Sean Wallace
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    Apr 8th 2015, 1:22 PM

    @Thomas Mac….probably because he’s a simpleton, and like quite a few other govt trolls, he seems to revel in other people’s misery.

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    Mute Thomas Mac
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    Apr 8th 2015, 2:28 PM

    Simpleton is being too kind,Sean

    8
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    Mute whynotme
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    Apr 8th 2015, 8:15 PM

    Patjoe is a nincompoop .

    1
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    Mute Paul M
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    Apr 8th 2015, 9:22 PM

    The only thing that makes sense in this article is the description under David Hall’s photo – “A Cluster Cock-Up” – excellent description of Hall and his half-brained, populist, nonsensical schemes to force everyone to pay for the bad gambling debts of the few.

    Can’t afford your house? Maybe move somewhere you can afford? But sure don’t worry about it, just get everyone else to pay for your bad choices instead – whatever happened to personal responsibility?

    14
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    Mute Tessier Francois
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    Apr 9th 2015, 6:24 PM

    Everyone here seems to have completely forgotten what brought everyone in this country into a the mess of epic proportion from a housing point of view.. at the same time former bankers, formers builder moguls and their cronies roam freely in the streets, their assets protected by the laziness and corruption of the local system.
    These mortgages arrears won’t be easily solved. Actually all BTLs in arrears should be dealt with as a priority, their release on the property market easing prices through the country, but frankly speaking families have to be helped to go through their debts problems if it is their family home, otherwise you just move the problem from one place to the other.. it is about family protection, not investors protection.

    3
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    Mute Bryan Kevin Peregrino
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    Feb 24th 2016, 1:01 AM

    Very helpful article on mortgage! The same happened in Australia in 2008, due to alarming increase of mortgage cases, the Australian government took action and found out that several mortgage providers and mortgage brokers engaged in improper lending practices maybe that’s the problem in Ireland too. If you want to learn more mortgage and bankruptcy in Australia, I highly recommend looking at http://www.bankruptcy-advice.com.au/canberra.

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