Madam, – Brian Lucey argues against helping people in trouble with their mortgages on the basis that “any bailout . . . will involve transfers from persons who did not borrow excessively to those that did” (Opinion, February 3rd).
Surely the same applies to the bailout of the banks. The bailout of the banks involves transfers from ordinary people who did nothing wrong to a small number of institutions whose managers have bankrupted the banks and nearly bankrupted the country.
So why are we doing it? – Yours etc,
A LEAVY,
Shielmartin Drive,
Sutton,
Dublin 13.
Madam, – Brian Lucey identifies first-time buyers from 2004 onwards as those most likely to be suffering from negative equity, but he also highlights a potential problem with a Nama-style bailout for such mortgage-holders as involving “transfers from persons who did not borrow excessively to those who did.”
However, during the boom it was routinely estimated that Government, at national and local levels, received about 40 per cent of the sale price of every new house and apartment, garnered through a range of taxes, duties and levies from a variety of sources.
Therefore, a Government bailout of those first-time buyers would constitute a refund of their own money, rather than a transfer from anyone else. As the major financial beneficiary of the construction boom, the Government, rather than the banks, bears the primary responsibility for any bail-out of mortgage-holders. – Yours, etc,