This article was submitted to the Mail on Sunday for publication on the 17th of March, it is not identical to the final edit which appeared in the paper.
There was a time when a single lady having a child was a shameful thing, I know this through experiences in my own family; the comments and remarks some people made were disgraceful. Thankfully as a nation we all woke up, nowadays the birth of a child is celebrated of itself and not for the moral parameters of the backdrop they are born into.
I can’t think of a single person who in calling another ‘bastard’ is making any sincere reference to the origin of the term, it’s still derogatory, but never used an indication of birth legitimacy. The move away from shame and guilt to seeing new life for wonderful even that it is has transformed us for the better.
That those views ever existed was an example of cultural consensus at its worst, but it’s happening still, only now it’s with debt, it’s time to change this broken record.
Not being able to pay for a house that you bought with good intentions is not a shameful thing, a mark of failure, or a sign that you are not a good person. And repossession is not equal to homelessness, it is not equal to being a lacking partner, parent or participant in society.
It’s a financial obligation that hasn’t worked out, any taboo is of the same brand that single mothers faced in the past, when viewed for what it truly is, it’s nothing to be ashamed of, unless we choose to stay in a place where twisted ideology reigns supreme.
This is not easily done, success is dependent on changing our views to home ownership which is engrained in the Irish psyche. And while losing a home is often a sad event (for some they are glad to finally be rid of the stress, burden of the unknown and uncertainty), it can also be a new beginning.
Sadly there is a growing consensus which believes that anything short of not paying your mortgage and still being able to keep your home is wrong. It tends to come from lobbyists and opposition politicians, I would beg them to actually read the relevant regulatory code and not jump to ill founded conclusions which are not in line with the working reality of people who do this for a living.
Last year there were only 194 actual repossessions, that is about one in every 750 of actual defaulters. And only one in 120 of homes where a single payment has not been made in over two years. The rate in every other country is five and six times higher. Adjusting for population the Danes (with a lower unemployment rate) would have repossessed about 1,500 properties last year. And they are seen as a ‘model of reason’ in the mortgage market. Russia, with a population of 141m people has fewer loans in arrears than we do.
Loans with arrears in Spain and Italy are 3.5% and 3% respectively, both countries have massive problems, Spanish unemployment is 26%! It only proves there is something peculiar about our inability to resolve this issue rationally.
Talk of ‘mass evictions’ or ‘people on the side of the street’ as a result of the new rules is a cheap linguistic trick which conjurers up the darkest fears of a populace who read about this kind of thing in history books growing up, they are only short of adding in that ‘the thatched roof will be set on fire while the black and tans beat your children’.
How can we learn that failure is part of success without allowing it to happen with some level of objective consideration? A full day has both morning and evening, and one is not superior to the other, because without the other the first couldn’t exist.
Kicking the can down the road is not an answer, both sides say this, but their conclusions are diametrically opposite. Debt write-downs can and will occur, that is the role of the insolvency legislation, and the idea of a ‘bank veto’ has been largely over-played, how can this conclusion be drawn when not a single insolvency under the new laws has even been applied for?
The choice we have is to live in a considerate world, where we are mindful of the needs of others but without trying to engineer every outcome, the process of repossession can be done in a fair manner with empathy, that point is never made publicly, by anybody.
It is true, if homes are repossessed there will be victims, but if they are not, there will still be victims. We have to decide what trade off is acceptable. Let me consider that last point, the ‘victims’ of non-repossession.
The home owner can be a victim, remaining in an unaffordable home means arrears are building up, they are becoming ever more insolvent is increasing their debt protecting them or making it worse? Couples looking to buy a home will pay more, or have less access to choice because a property where no payment was made in two years has not come onto the market, are we really happy to see them have less choice and over pay to protect the incumbents?
And people who have their home turned into social housing as a solution will skip the 100,000 person long queue for social housing, their merit not being that of greater need, but of having borrowed. Is that fair? Given that many on the housing list are of such low income they couldn’t have hoped for a sub-prime mortgage it isn’t, they never saw the Celtic Tiger because they were poor the whole way through, they never stood a chance of being a borrower, and now their middle class fellow citizens get a home before them.
The debate is insincere, and in many ways only serves to reinforce a class system where the current group of beneficiaries is kept artificially afloat, while the unintended consequences are ignored. Ask a current buyer in a city if they can find good housing at a reasonable cost, you’ll find they struggle, but they don’t have a genetically coded moral argument in their favour so nobody cares. Whatever about borrowers being largely innocent, those coming of age now are totally innocent.
Then we have the politicians and Central Bank, both keen to complain about a situation they actually helped to create. The Central Bank created the Code of Conduct which is now reversing the number of calls that can be made, they created the moratorium on repossession which may be undone, and they dress this up as ‘new regulation’ when it is in fact an admission of their own bad decisions. Now we are going to copy failed Eastern European policy, because something similar was tried, tested and failed in Hungary in 2011.
The Government are the same, how dare anybody admonish John Moran for telling the truth? He is a fine civil servant, as good as any we have had, but his sin was to be honest. He made the error of speaking the truth. What he should have done is told a politician who could then dress it up in pigeon-politic-speak which makes it sound fair and inoffensive to everybody but which doesn’t change outcomes.
Now they are setting targets which the banks are already working towards, its a charter of the obvious, with the ‘threat’ of provisions if the targets are not met. The target is on ‘proposals’, that means banks can send out ‘interest only for 5 years’ and count it as a medium term solution.
Maybe the Central Bank will say ‘that’s not good enough, put aside provisions’, that will create bank losses, or the banks will have to set aside greater yet levels of capital which will restrict lending, again hurting those who want credit for the sake of those who already have it.
The Government responsibility was to get insolvency legislation operational, quickly. They failed in that. They don’t need to get tough with banks, they need to do what they were given a mandate for, and stop deflecting blame away from their own incompetence.
They demand wage cuts, tax increases, bring in an ill thought out property tax, cut child benefit and then say arrears are due to the banks? It’s due to their own policy which is enforcing a mass reduction in standards of living, but who would bother to frame the debate in those terms? It’s just another uncomfortable truth we can’t accept.
Until we start to see this disaster in non-hyperbole terms we won’t get the truth, and it is the truth that will set us free.