Ordinary borrowers need better protection

IN every society there are truths that are so basic, so fundamental, that they cannot be questioned. Dare I hope one good thing that may come out of the present financial crises is the realisation that these truths are the ones that most need to be questioned.

Chief among them is the line that come hell or high water, no matter how irresponsibly lenders have behaved they must get every penny of their money back, plus interest, even if you and I as taxpayers end up paying for it in the form of mortgage interest supplements.

In this context Juno McEnroe’s article (January 2) made interesting reading.

Yes, all three borrowers behaved foolishly but at least two of the mortgages could be regarded as subprime. What is amazing is that, despite the damage done by subprime mortgages, there has been no question of legislation to deal with them.

Surely something along the following lines should be considered. In the first instance, in case of difficulty, the borrower should approach the lender and seek an arrangement acceptable to both. If this fails, then it should be possible for the borrower to seek the protection of the courts. If a developer can do this, why not a family? Specifically they should seek a freezing of repayments and interest for a period of three to six months to be reviewed at the end of that time.

To ensure the legislation was only used in genuine cases, there should be provision for penalties where the court is satisfied there is an attempt at abuse.

Apart from anything else, lenders would hesitate before getting involved in irresponsible practices if they knew that such legislation was in place.

Brendan Casserly

Abbeybridge

Waterfall

Co Cork