The expert groups expected failure to make any real recommendation on the changes needed for home repossession is yet another indication of how the banks and government are in complete denial of the massive problem in the mortgage market and in the banks. And more disturbing how the banks are still in control of the establishment.
The lack of action in this area would seem to be of benefit to householders but in fact it is quite the opposite. With no real effective repossession process in place the banks are being given yet another to opportunity to ignore the problems, not deal with the collapse in the home prices and therefore the collapse in the banks security and loan value.
If we had a more efficient repossession process we would see banks forced to deal with problem loans, agree write offs of home loans which would be sustainable if the loans were written down to market values. Where loans are not sustainable at current value properties should be repossessed and sold by the banks so that the property market can get to the real levels.
What is needed is a functioning property market and functioning banks. This will mean recognising losses, writing down loans which are never going to be paid and the inevitable repossession of some homes which were always unsustainable. However, the chasing of people for the shortfall for the rest of their lives must be outlawed.
The banks will have to someday take responsibility for selling these unsustainable mortgages and the lack of repossessions will put this off even further.
Paul C Carroll Accountant
NEO Financial Solutions