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Debt forgiveness for homeowners

Sir -- Debt forgiveness is as inevitable as it is essential. Mr Elderfield (the Financial Regulator) should be forcing banks to devise schemes to facilitate it, rather than allowing them to deal with it on an individual basis.

It is essential -- not just for those in negative equity, but for the economy in general -- that a scheme for debt forgiveness is introduced. A significant portion of the population is utilising 60 to 70 per cent of their wages to pay their mortgage. Is it any wonder that our shops are empty and the economy stagnating? People do not have money to spend.

It is not just the Government that is bankrolling the banks. The people are also bankrolling them. The majority of people's money is going to the bank to meet their mortgage repayments. A failure to formally introduce debt forgiveness will cause further stagnation in the economy and lead to more businesses closing and more job losses.

Each customer should be allowed to write down the amount of their mortgage relative to the current value of their property, rather than the value of their property as valued at the time the mortgage was taken out, with the consequent reduction in capital and interest repayments.

At least people would be left with money in their pockets. Now that would be a moral hazard!

Sean Mahon,

Co Roscommon

Sunday Independent