Recalculating mortgages to reflect current market value?

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This morning, wiping the sleep out of my eyes whilst waiting for the kettle water to boil, I could have sworn I heard someone on Morning Ireland say something along the lines of:

"...the Financial Regulator has said that people should be up-to-date on their mortgage payments before taking on other loans.  Mortgage payments should be a priority..."

As stated, I was only half-awake, so perhaps heard it wrong.  But Ireland is such a mad place that anything is possible.  

There is, you see, a suspicion  that many people who are in a position to pay their mortgages simply choose not to, because they don't like being in negative equity.  They also know that repossession rates in Ireland are way behind those of the UK... even for buy-to-let investors.

Now I am not saying that the first letter writer in this week's Irish Times falls into either of the categories above - she pays her mortgage diligently, as evidenced by previous correspondence to that same newspaper - but the missive betrays a certain mindset many in Ireland have in relation to post-bubble property debt.

I am sure there are even buy-to-let investors who borrowed large during the bubble in the hope of making a larger profit.   Would they too think their mortgages should be "recalculated" to take into account current market value? 

And if they succeeded in doing so, who would pick up the tab?   

You know the answer to that, Muggins. 

Irish Times Letters, February 16th

Sir, – At last the Government and the Revenue Commissioners will calculate the true value of my home.
I will send this on to my mortgage provider who can then duly recalculate my mortgage based on this invaluable information. – Yours, etc,

SORCHA DONOHOE,
Sheridan’s Lane,
Lower Dargle Road, Bray,
Co Wicklow.


It has been said that sarcasm is the lowest form of wit.  That may or not be, but nevertheless,  the following response by another letter writer is excellent:

Irish Times Letters, February 20th


Sir, – What a fantastic idea from Sorcha Donohoe (February 16th) who wants her mortgage recalculated to reflect the current value of her property. If only she had had that idea years ago, during the property bubble.

If mortgages had been reviewed annually to reflect the value of the property, repayments would have spiralled upwards every month, our banks really would have been the healthiest in Europe and we would never have got into this mess in the first place! 

Of course that is assuming that people would welcome such an arrangement and would be willing to share their gains when property values soar and not just their losses when values plunge. But now that I think about it I don’t remember any similar suggestions in your paper back then. – Yours, etc,

JAMES MARSTON,
Pinewood Avenue,Glasnevin, Dublin 11.

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