Ireland reportedly has 40,000 mortgages already in arrears (3 months or more). Anyone who bought or remortgaged property in the last 5 years is likely to be in negative equity and unemployment is back to the levels of the early 1980’s.
From personal experience I know that a huge number of people bought residential investment properties (R.I.P.s), often several properties each after releasing equity and going again. With the 4 year National Recovery Plan hairshirt, NPPR tax, PRTB charges, 25% of the mortgage interest being disallowed from 2009, reduced rents and longer vacancies between lettings, the eventual rise in interest rates will cause carnage in Ireland. Handing back the keys is not a useful option in Ireland as the debts do not go away. Personal bankruptcy is effectively a life sentence, unlike in the UK. The expert group on mortgage arrears which has sat since February 2010 has only been asked to look at the principal private residence, a.k.a. the family home. The best they could come up with is a “deferred interest scheme” for homeowners in trouble. Any thoughts of a debt forgiveness scheme have been ruled out. We pay to rescue the banks which in turn will crush us without mercy. Nothing has been considered for the residential investment property investors who had hoped that property would be their pension. The only consolation is that the problem is likely to be huge and there will be so many people in trouble at the same time that something will have to be done. It is unfortunate that there is no public discussion or planning on this matter, nor is there likely to be until this crisis “surprises” us.