Stephen Kinsella: Banks must take care separating who can't pay from who won't
ONE way to achieve a solution in a negotiation is to try hard to imagine what the other side's solution might look like, then work backwards towards your preferred solution.
In the three-way negotiation between borrowers, lenders, and the State, considering the needs of the banks – as unpleasant as that may seem – reveals a need to understand how borrowers in genuine mortgage distress cope with the stress of excess indebtedness. The key question is: how do we help those who can't pay to get the banks to see them as different from those who won't pay?
This week, the national obsession has trundled around again to mortgages following the publication of the latest arrears data. They show 11.9pc of private residential mortgage accounts for principal dwelling houses are in arrears of more than 90 days, a 3.4pc increase year on year.