Mortgage freeloaders should pay the price

TEN years after the crash, many of the scars still smart; for large sections of the working population it was a life sentence from which there will never be a release. While the economy has made extraordinary gains, there is a sense that those most responsible for the country’s ruin walked away from their responsibility and managed to escape relatively unscathed.

It would be nice to think that there would be some inviolate engine of cosmic retribution that we might call into play to call those who breach our codes of fairness to account, at the flick of a switch. But it doesn’t quite work thatway.

While the banks, building societies and financial watchdogs could still shrug most of the misery off their shoulders, householders and taxpayers carry the debt. But one man’s disaster can be another’s opportunity. As revealed today, in 2011, when the courts impeded the power of banks to repossess properties, thousands of people took advantage of the situation to stop paying their mortgages.

Once they realised there would be no risk attached to not meeting their obligations they exploited the situation.

Controversial though it may be, the evidence from economist Terry O’Malley is solid.

It may support the argument made by some lenders that a cohort of borrowers is bilking the system through strategic default.

No matter how badly lenders behaved, agreements must be honoured by those who can afford to. Otherwise more injustice is visited on society. The system breaks down when sharp practice becomes endemic. As we know all too well, the bill will be ultimately passed on to those who always pay their share. Freeloaders must be punished, not rewarded.