R
RIAD_BSC
Guest
This is such an emotive argument, it always creates more heat than light. People always mix up negative equity with arrears, and they are both different issues with different solutions and different consequences.
I get it that people are sick of bailing out the banks, and don't want to bail out mortgage holders too, especially if they are working hard to pay off their own mortgages. But sometimes, I am shocked by the lack of empathy and sympathy for people like the Clonee couple. There is a real social and economic issue there that needs to be addressed. It won't go away, no matter what the moral hazard.
FWIW, here's my tuppence worth.
1 - People in NE should not receive state help just because they are in NE. They should continue to repay their mortgages if they can afford to, NE or not.
2 - People in deep NE who are also deep in arrears, and are unlikely ever to be able to meet their mortgage repayments, should have some of their debt written down by the banks so they can get on with their lives. This is what happens with unrealistic debts in business, it happens in other countries, and it is the most sensible thing to do. However, this should not apply to people who bought expensive homes. Nobody should get a debt write off to allow them live in a mansion. Those people should be forced to trade down to modest homes as part of the package.
3 - People deep in arrears who are not in NE should be forced to sell their homes to pay off their loans. That's just simple loan security enforcement. If they have equity, they don't need anyone's help, the state's or the banks'.
4 - People who are deep in NE, have good solid incomes, but are desperate to move for whatever reason (job offer in another city, tiny high-rise apt that may be unsuitable for raising children, etc....), the banks need to work with these people to find solutions for them. The state doesn't need to help them, except maybe by changing the rules re TRS etc so that they are not too heavily penalised for renting out their apts, and moving to become renters in more suitable family homes.
And the general public really needs to show people like the Clonee couple some basic compassion - we live in a society. Looking at some of the comments on this thread and elsewhere, you'd swear we were at a Sarah Palin rally (The Irish Milky Tea Party?) These people are not the enemy.
Finally, Clinton was right. Moral hazard aside, the economy will never recover unles the mortgage issue is addressed in some way. Consumer spending will never return with 300,000 households in NE who don't know what's around the corner. I'm not saying they should all be helped just 'cos they are in NE, but unless those people know there is some sort of help potentially available to them should they really, really desperately need it, they will never spend a penny again, and unemployment will stay high.
This isn't just all about fairness and moral hazard. It is also about what's right for the society we live in and the country and the economy as a whole. Recovery should come first. For a recovery, we need solutions to the mortgage crisis. There is no point in pretending the issue will just go away over time. That's just ostrich head-in-the-sand stuff.
I get it that people are sick of bailing out the banks, and don't want to bail out mortgage holders too, especially if they are working hard to pay off their own mortgages. But sometimes, I am shocked by the lack of empathy and sympathy for people like the Clonee couple. There is a real social and economic issue there that needs to be addressed. It won't go away, no matter what the moral hazard.
FWIW, here's my tuppence worth.
1 - People in NE should not receive state help just because they are in NE. They should continue to repay their mortgages if they can afford to, NE or not.
2 - People in deep NE who are also deep in arrears, and are unlikely ever to be able to meet their mortgage repayments, should have some of their debt written down by the banks so they can get on with their lives. This is what happens with unrealistic debts in business, it happens in other countries, and it is the most sensible thing to do. However, this should not apply to people who bought expensive homes. Nobody should get a debt write off to allow them live in a mansion. Those people should be forced to trade down to modest homes as part of the package.
3 - People deep in arrears who are not in NE should be forced to sell their homes to pay off their loans. That's just simple loan security enforcement. If they have equity, they don't need anyone's help, the state's or the banks'.
4 - People who are deep in NE, have good solid incomes, but are desperate to move for whatever reason (job offer in another city, tiny high-rise apt that may be unsuitable for raising children, etc....), the banks need to work with these people to find solutions for them. The state doesn't need to help them, except maybe by changing the rules re TRS etc so that they are not too heavily penalised for renting out their apts, and moving to become renters in more suitable family homes.
And the general public really needs to show people like the Clonee couple some basic compassion - we live in a society. Looking at some of the comments on this thread and elsewhere, you'd swear we were at a Sarah Palin rally (The Irish Milky Tea Party?) These people are not the enemy.
Finally, Clinton was right. Moral hazard aside, the economy will never recover unles the mortgage issue is addressed in some way. Consumer spending will never return with 300,000 households in NE who don't know what's around the corner. I'm not saying they should all be helped just 'cos they are in NE, but unless those people know there is some sort of help potentially available to them should they really, really desperately need it, they will never spend a penny again, and unemployment will stay high.
This isn't just all about fairness and moral hazard. It is also about what's right for the society we live in and the country and the economy as a whole. Recovery should come first. For a recovery, we need solutions to the mortgage crisis. There is no point in pretending the issue will just go away over time. That's just ostrich head-in-the-sand stuff.
