Should troubled mortgage holders stop paying the banks?

Such a question usually draws gasps of “you must be realistic” or “oh you don’t understand anything, do you” from the well paid ‘experts’ in economics and politics – because such a suggestion is contrary to the basic principles on which our economy is organised and which pays the wages of these ‘experts’.  But, given the systemic nature of the crisis we are in, perhaps the basic principles on which our economy is organised are wrong, maybe we need a new set of principles?

We are told that we need the banks to fund our economy, to finance growth, jobs and so on; and that they in turn must pay their bond holders in Germany, France and the UK so that international financiers can have ‘confidence’ in us.  This ‘confidence’ is needed so that so we can borrow more and repay more, so we can keep the gravy train running, so that our economy can continue as it always has.  This system means that the socially generated wealth in our economy continues to be used to pay off private corporations and finance speculators – the work of the many is being used to pay the few.

Why do we continue with such a system?

For those who are not pinned to the wall in difficulty or who think the banks occupy some sacred and holy space in our lives, the current situation may seem possible to rescue.  But every day more and more are being forced into difficulty and are faced with this question: why should we keep paying? and some are faced with the reality that they simply can’t pay any more!

Tens of thousands of citizens are faced with crippling mortgage repayments that are causing all manner of hardships and distress.  Homes are being repossessed, surrender and rent back schemes are being put in place, keys are being returned to banks, families are breaking-up under the strain, people are taking their own lives in desperation.  The situation right now is critical, over 100,000 loans are in difficulty and the situation is set to worsen due to ongoing business closures, increased unemployment, wage reductions and welfare cutbacks.  In addition, the banks are under pressure from the infamous bond holders to bring in cash and their period of soft handling is coming to an end – so they are and will increasingly demand their pound of flesh.

Should we allow families to be enslaved to banks?

We think it is time to look at the legitimacy of these ‘troubled’ loans, are they legal? are they fair? should we accept them?  What is involved here; how should we view these loans?

  • Firstly, every contract has at least two parties and all are expected to act in an honourable manner when contracting.
  • Secondly, and possibly more relevant, when one party to a contract has the status of being an ‘expert’ that might be relied upon, for example in finance, this places additional duty on their part to conduct business in a proper manner.
  • Thirdly, in addition to that, citizens have for many years been led to believe that the state operated a system of financial regulation on their behalf, to ensure fair play and to defend the interests of citizens – our taxes paid a lot to ensure such regulation.

Most troubled mortgages you look at fall down on each of the three points we make here.  On top of this, when the lending institutions were asked by our state to explain what was going on they LIED, they conspired to hide their insolvency and fraudulent dealings, they withheld information and continued their bonus taking and later even extended it to stealing our public funds.

All pyramid schemes reach exhaustion!

We know that loans were pushed out the door in a most irresponsible manner, big commissions were paid and big pensions and bonuses were awarded, without regard to regulations.  Lending institutions extended credit far beyond normal guidelines, they also borrowed in excess of their ability to repay.  Everything ran much as in a pyramid selling scheme, sell more credit to repay the last loans and keep expanding the base at all costs – there was only one possible outcome.  Management in these institutions encouraged developers, developers encouraged lenders, politicians and government encouraged them all, lots of money changed hands.  This frenzy of lending, borrowing and commissions has been outlined many times, involving big business interests, foreign and domestic banks and speculators and the political systems they prop-up – but it is just the domestic mortgage holder that is left to carry the shortfall.  The big developers have been rescued, the financial institutions have been rescued and we are paying off the foreign bond holders – the ordinary men and women of Ireland are left with the bill.

Now that the state looks like the biggest shareholder amongst the mortgage lenders it brings the responsibilities of both the lenders and the lack of state regulation under one roof, a ‘roof’ that we own, it is our state.  So, given the improper and negligent behaviour of both the state and the lenders, and their encouragement of the lending spree, their recklessness and greed for private profits, they should now carry the can.

Ordinary people should not have their lives enslaved to such a system.

We said a new set of principles are needed

One might say that the crash could not be foreseen, and so we can’t attribute blame – we don’t accept this, irresponsible and dishonest conduct should always carry blame.  Others might say it is an international crisis, and we are just part of that so there can be no fault.  Yes, we are part of the international crisis of finance capital worldwide, but our great rulers and their vested interests have willingly exchanged the interests of Irish people for their own private interests – they are criminals.

The new set of principles are that we need a plan for the development of our economy which places people at the centre.  Any plan for development of the Irish economy should be aimed at filling the needs of the Irish people – it should not start with worship of foreign investment or the ‘bond markets’ – in fact we should withdraw completely from them.  We need to develop our economy based on our own resources and free of dependence on foreign investments and such – this does not mean we should be isolationists or not trade internationally, but that such trade should be on the basis of mutual benefit.

Here comes the IMF, ECB and the Germans to save their system!

Developments in recent weeks and days leave no doubt, by any criteria of judgement, that we are not in control of our own economic destiny.  We are completely depended on foreign banks, corporations and market speculators – all of whose real interests in life is to secure private profits, they have no concern for the wellbeing of Irish people.  We must be done with them!

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Claire
Guest

Yes Diarmaid this is exactly what I was talking about. We must discuss this further. Claire

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