Sunday, 16 November 2008

"Home Choice" Builder Bail-out Scheme

Gombeen Man would like to draw attention to a campaign on the Irish Home Truths website, which is helping to organise opposition to the Government’s Builders Bailout Scheme – otherwise known as the “Home Choice” loan scheme.

“Home Choice” offers “choice” so long as you want to buy a new home, within a certain price bracket, in a development where builders can’t shift their overpriced houses and apartments. In a nutshell, it offers Government-backed mortgages to people who have already been turned down for loans by the banks, most likely on the basis that they are trying to borrow more money than they can safely pay back.

Against the background of the financial crisis, brought on by careless lending and borrowing, the word “scheme” can only be used in this instance in the derogatory sense. That is, the Government “scheming” with their construction industry benefactors to use public money to subsidise their private profits.

A piece in today’s Sunday Times quotes NUI Galway economist, Alan Aherne, saying “if you get a Home Choice loan but have been rejected by two banks, that’s equivalent to sub-prime lending… that person has been rejected for a mortgage because either the price of the property they wanted to buy is expected to fall, or because of changes in their financial circumstances”. David Duffy, of the ESRI, is reported in the same paper as stating that if people do default in their payments, the cost will “have to be picked up, and given that it’s a Government scheme, that cost will fall back on the taxpayer”.

Incredible. Given that property is still overpriced by any conventional analysis, and the fact that we are in a deepening recession - which will see an increase in unemployment – this could very well happen. Where else, pray tell me, would you get an elected government, bending over backwards - to extremes that would make a yogi blush - to vested interests in such a blatant and unashamed manner?

The report goes on to say that P Elliot, the Cavan-based developer, could make EUR 31.8 million by shifting unsold apartments through the scheme. Think about that for a minute. The Government is going to use your money, to keep property prices artificially high, so builders can continue to make astronomical profits, and people can be in stuck negative equity mortgages, guaranteed by you. Doesn’t it make you proud to be Irish? After all, aren’t the developers one of the most vulnerable groups in our society? We need to look after them. We need to show we care.

If you think this is all somehow slightly immoral (not to mention illogical), you could do worse than visit the site above and join the hundreds of people who have submitted complaints to the EU’s competition directorate about the Government scam, on the grounds that it contravenes competition rules, applying as it does - conveniently for the builders - to new properties only.

Back to Gombeen Nation main page

No comments: