Generosity needed to resolve loans crisis

Despite the great destruction of wealth, the squandering of lifelong achievement, the collapse of businesses built on courage, sweat, and endless hours, despite near record unemployment figures, there can hardly be a more distressing manifestation of our economic collapse than the prospect of mortgage holders, unable to meet their obligations, losing their hard-won homes.

The prospect of a family that did no more than was this society’s norm and made the commitment necessary to borrow money to buy a home losing that home because they can no longer make repayments cuts to the very bone. It seems like a fundamental breach of part of the social contract we all rely on to make our way through this world. That they are losing a house they imagined their home at the behest of banks that, among many other institutions, fuelled the property madness that led to our economic collapse rubs salt into an already tender wound.

Of course, this applies to the majority of the 97,800 private residential mortgages in arrears of 90 days or more by the end of June because it must be assumed that the great majority of people are sincere in their efforts to make the repayments to keep a roof over their heads. This default rate represents some 12.7% of home loans, compared with 12.3% in the previous quarter, or 95,554 loans. Longer-term arrears — mortgages behind by more than 180 days — rose by 3.8% while, quarter-on-quarter, the number of accounts in arrears for more than 720 days was up by 11.3%. Showing that even the darkest cloud can have a silver lining, early arrears showed a decline, falling by 3.3% to 45,018 loan accounts.