Editorial: Homeowners must not be thrown to the wolves
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.