Mortgages and Moral Hazard

Jumping on the NAMA bandwagon has clearly robbed Fine Gael of any critical faculties they may still have had, if their latest wheeze is anything to go by. Oblivious as always to the State's finances, the leaders of the opposition have tabled a raft of amendments to the Government's NAMA bill, which is fair enough, as it can't be made any worse by changes. However, taking the populist path has led the party into the murky world of moral hazard, in their call for a "bailout for homeowners".

Demanding protection from foreclosure for the buy-to-let brigade, who stuffed their boots while the going was good in their ambition to be the new landlord class, might be popular with Fine Gael's core constituency, but it does nothing for the stability of society: if anyone cares about that anymore?

It's clear that the only people who are in 'negative equity' are those who are desperate to offload property, especially those who bought within the last three years. Why are they so anxious to sell? Because they are being hit by the double whammy of expensive repayments to the banks and the new 'second home' levy of €200 per house or room, which is bad news for all the greedy young landlord types who were so sure all the bills would be covered by their tenants.

We never get a mention in the press or parliament, but there are tens of thousand of us who resisted the temptation to be multiple homeowners living off students and shopworkers. We were sneered at by all those 'go-getters' who were buying like there was no tomorrow, but we took the disdain and refused to get rich on credit. Little thanks we are getting now.

As usual, those of us who practised the forgotten virtue of prudence are now in the firing line for bailing out the greedy FG and FF types who ransacked the banks for what they could get, in order to 'flip' houses and apartments for vast sums of money. Now we are being invited to shed bitter tears and provide billions of euros to save these people from the results of their own greed. What makes it even more galling is that Fine Gael are throwing the kitchen sink at Fianna Fail and the Greens for the alleged bailout of developers, while the only solution they can come up with is to add a few more billion to the cost of NAMA by extending the scheme to their own voters, ie, buy-to-let speculators.

With such egregious economic illiteracy on display in the Dail, it is truly a miracle that the international markets are still willing to lend us that €500 million we need every week to keep the public sector in Bulgarian apartments and 4x4s.

Indeed, the only result of making the taxpayer carry the repayments for this lot would be the total freezing of the property market, ensuring the failure of NAMA and locking-in the negative equity that is still only a paper loss due to the moribund housing market.

Well done, Lucinda Creighton et al,. Another fine mess you are trying to get us into.