Editorial: Homeowners must not be thrown to the wolves
Published 09/07/2014 | 02:30
IT is disturbing to learn, even though it makes financial sense, that bailed-out banks are moving to repossess homes that have climbed back into positive equity first. Yesterday, a report by the Oireachtas Finance, Public Expenditure and Reform Committee warned that rising property prices could place more homes in repossession than ever before. Ireland has historically low rates of repossession.
And during the traumatic years that followed in the wake of the 2008 global economics crisis, banks – including those guaranteed by current and future taxpayers – made a virtue of not evicting people from their homes and seizing their investment properties. This faux concern for homeowners masked the reality that it made no strategic sense for banks to evict people when the value of their loans vastly exceeded the value of properties secured on them. That is changing.
And as property prices rise, banks that were saved by taxpayers are less likely to offer homeowners a restructuring of their debt or alternatives to repossession.
Increased property prices are important for economic recovery. But the all-party report exposes, once again, the power imbalance between financial institutions and over-indebted borrowers with no meaningful access to adequate legal and financial advice. The Personal Insolvency Act 2012, the jewel in the crown of the Government's response to indebtedness, is at risk of being rendered a cuckold by an all-powerful veto wielded by banks on debt deals.
Banks, many of whom have sold their mortgage books to foreign entities that are not captured by Irish consumer protection rules, are flexing their legal might and presenting the results to the Central Bank as "sustainable solutions".
Issues such as housing, repossessions and debt settlement are the main priorities for many citizens in the years ahead.
Just as financial institutions were allowed to operate unchecked during the boom years, it is imperative that the Government provides a fully resourced, consumer counterbalance to their power as the economy recovers.
Brooks saga shows we need to change our tune
IT is not a national disaster, but for 400,000 Garth Brooks fans it feels like one. The cancellation of all five concerts at Croke Park is, however, a national embarrassment and portrays Ireland in a very poor light and certainly far removed from the 'best little country to do business' image that we like to project. Everyone is a loser, but none more than the fans, from home and abroad, who wanted to see the singer perform in Ireland after a gap of 20 years and splashed out hard cash for tickets, transport, accommodation that could, in total, have put vast sums of money into the Dublin economy.
There is plenty of blame to go around, from defective legislation to an unaccountable decision-maker and the lack of an appeals process.
In hindsight, the promoters, the venue and the artist went about a major undertaking without, it seems, conferring with local interests. Time and again, we seem to sacrifice the common good.
Of course, the residents of Croke Park have rights and of course they deserve consideration, but sometimes we all have to make sacrifices for the greater good. Yet in this country, whether it is gas from the west of Ireland, wind turbines or pylons, the national interest too often takes second place to relatively narrow self-interest.
The Garth Brooks affair has been handled badly from start to finish. In its aftermath it is difficult to disagree with mediator Kieran Mulvey's contention that collectively we have an "infinite capacity to score own goals".