Sunday 11 December 2016

This immorality tale must never be forgotten

Forcing ordinary folk to foot the bill for bank crisis shows we need a serious rethink of our values, writes Eamonn Blaney

Published 05/09/2010 | 05:00

According to the Financial Regulator, there are roughly 768,000 mortgage holders in Ireland and approximately €108bn outstanding in residential mortgages. Consequently, it is easy to work out that the average mortgage holder owes the banks approximately €142,000.

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What's very interesting about this figure is that the actual amount that will be repaid to the banks over the period of the mortgage (assuming a 20-year period at an average interest rate of 5 per cent) will equate to somewhere in the region of €376,768. It is primarily for this reason that the banks are absolutely adamant that mortgages cannot be reneged on, particularly by handing back the keys. There is a gross profit of €234,768 for the bank at stake.

The banks effectively want it every way -- full security against all monies that have been borrowed from them in the form of a personal guarantee from each mortgage holder and, failing that, a State guarantee, notwithstanding the fact that they already hold the deeds of your property. But it gets worse. As a direct result of their utter incompetence, the banks lost all the bond holders' and depositors' money and are now bankrupt. Yet they expect that these losses will be paid back in full by mortgage holders and taxpayer. Or else we "risk damage to our international reputation".

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