Séamus Healy (Tipperary South, Workers and Unemployed Action Group)

I would like to put forward some case histories. The first relates to a self-employed man with a family living in a modest three-bedroomed house and into the second half of his mortgage. He was doing well but due to an addition to the family needed a modest four-bedroomed house. Thinking he could deal with the mortgage on the new house, he went to his bank and looked for a mortgage on the basis of selling his first house. The bank manager advised he should not do that but should let his house and take out a 100% mortgage for the four-bedroomed house. Unfortunately, the man took that advice. Now he is unemployed and unable to pay the mortgage on either house.

The second case relates to a single public servant living in Dublin in rented accommodation who applied for an affordable house from the local authority five years in succession. Eventually, in September 2008, he was offered an affordable apartment at a price of €278,000 - a good price at the time when the same apartments were on the private market for €470,000. He jumped at the offer and felt he could afford the payments. However, 12 months later, following two cuts in pay and a pension levy, he found himself in significant negative equity and no longer in a position to meet the mortgage repayments. That is the kind situation in which many people find themselves. The solution is to freeze mortgage interest rates at rates pertaining in 2008 at the time of the bank guarantee, but that is not enough. The capital debt needs to be reduced to the level of the current house price and householders must be legally protected from eviction. That would be a fair way to deal with the current situation.

Some defenders of the banks and building societies claim that it is the home owners' fault; in other words, the people who took on these mortgages should have known better. However, we all know that during the boom, kept economic commentators of finance houses repeatedly told us through the media that people needed to get a foot on the property ladder before house prices rose again, that there was no chance of a property crash and there would be a soft landing at worst, and that the banks were well capitalised. RTE made such broadcasts daily and national newspapers with lucrative property supplements followed suit. We now have tens of thousands in negative equity with many finding it impossible to meet their mortgage repayments and some increasingly threatened with eviction.

The Central Bank is funded by taxpayers including mortgage holders. Its duty is to ensure prudence in banking. Top business people, trade union leaders and senior civil servants on its board, who reported to the Minister for Finance, allowed the banks to borrow €90 billion abroad between 2003 and 2007. They allowed the banks to lend out that money with meaningless security to developers and others creating a property bubble which drove the price of houses skyward. All the Irish elite are represented on the National Economic and Social Council. This includes professors of economics from the Economic and Social Research Institute. The institute is funded by taxpayers to give expert advice to Government but nobody shouted "Stop".

Freezing mortgage repayments, while welcome and necessary, will not be enough. The capital debt must be reduced to the level of the current house price and householders must be legally protected from eviction. That would be a fair way to deal with the situation.

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