Irish Moral Hazard Organisation (IMHO)

Dear all,

After an Irish Times article on Friday speculating that the government are set announce plans for state mortgage payments, an FGer on Newstalk saying the only solution to mortgage arrears was to just take the hit and write it all off, and then more of the same on Claire Byrne on Saturday i could take no more!

Hence the birth of the Irish Moral Hazard Organisation (IMHO) :wink:

In its current form it is just an open letter objecting to the idea of tax payer funded write downs, mortgage payments etc etc. We’re hoping that people will lend there support by simply using the link on the site to sign the letter. Every time somebody signs it, another copy is sent to

We would welcome any suggestions, additions to the letter, the site, etc etc. This is not intended to be a David Hallesque ego trip but is intended to reflect the views of the silent majority so welcome all contributions from that parish, and I figured the pin was a good place to start.

We’d particularly welcome any suggestions of additional emails to add to Kenny and Noonan as recipients.

Given the IT article suggests the government are meeting this week ahead of an imminent announcement the more signatures we can get the better, so if you agree with the content of the letter please sign it, it only takes two minutes.

If we get any decent number of signatures we’ll grow the resource with links and critique of ongoing nonsense, and try and push it out to media.

I’ll paste text of letter below so you don’t even have to go off site to read it! We accept it is very long but not sure how to condense it. Looking forward to your feedback!

An open letter to those who appear to believe that solution to the mortgage arrears crisis is anything other than the obvious:

Dear Taoiseach Enda Kenny, Finance Minister Michael Noonan, CEO of Irish Mortgage Holders Association David Hall, The New Land League’s Jerry Beades and any other individual or organisation who thinks we should pay our neighbours debts:

When blatantly self interested loons such as Jerry Beades and his ilk were dominating the airwaves wittering on about writing off their debts whilst retaining their assets, those of us who believe in paying our debts and living within our means could simply dismiss them as nutters, only likely to be taken seriously by the financially illiterate living in fantasy land.

However it beggars belief that our Taoiseach and Finance Minister now appear to agree with these chancers, and are considering using taxpayers funds to pay the mortgages of those who cannot or will not pay them for themselves:

“…it is also understood the Government is considering a separate scheme that would allow borrowers to retain ownership of their properties but offer them ongoing State support to help them pay their mortgages.”

Source: The Irish Times, April 10th 2015.

In light of recent reports on the government’s intentions, a group of like minded individuals decided it was time our own voices were heard. We collectively refer to ourselves as the Irish Moral Hazard Organisation (IMHO) for obvious reasons.

We are varied bunch, but all of us have three things in common:

  1. We are taxpayers
  2. We are voters
  3. We share the old fashioned but unfashionable belief that if you do not pay your mortgage your house should be repossessed

Hence if you are spending our money and seeking our vote it is hoped you’ll take our views into account.

All of us have already paid a price for delinquent borrowers through increased taxation, and some of us have also paid an even heavier price via huge losses on bank shares. If you write off the losses people have made on property will you repay the losses on our share portfolios and other consequential losses of the property crash?

Some of us are mortgage holders who have been diligently paying our mortgages, often with great difficulty; a difficulty that will only increase if we’re asked to pay our neighbours’ mortgages as well. Should we continue to pay our own mortgages or will the state pay a portion everyone’s mortgage?

Some of us are living in rented accommodation and we make sure we pay our rent on time every month, not only because we believe in paying our way but the fact that the landlord could evict us swiftly for non payment keeps us honest. Do you think if the same threat of swift eviction hung over mortgage holders we would have had such a huge arrears problem in the first place? Why are our principle private residences of lesser importance than a mortgage holders? They don’t actually own their house until they’ve paid for it.

Some of us have sold properties we could no longer afford due to changes in circumstances and moved to smaller houses or less expensive locations that we could afford. Having made this emotional decision do you think it is right we should subsidise those who refuse to move to a house they can afford?

No doubt the staggering numbers of people who are over 720 days in arrears has not escaped your notice, but have you reflected on the irony that many people are essentially living for free in houses they cannot afford?

Some of us are seeking to buy properties and sick of the incessant intervention preventing a normal functioning property market. Some of us can afford to live in those houses and would like the opportunity to buy them at a price set by the free market.

We frequently hear that the recent property price increases do not reflect another bubble because the banks are no longer giving out easy credit, rather it’s a supply a problem. Again only the financially illiterate are unable to see that the supply problem would be solved by repossessed houses coming on to the market, and the current occupants of those houses are enjoying the fruits of very easy credit – they’re not paying for it all! It is most definitely a bubble driven by cheap credit.

We frequently hear the bubble prices being used as some sort of rational benchmark, eg “only 20% off boom prices”. If you now believe in a wide scale write off or subsidy of mortgage debt has it not occurred to you that these prices were never real in the first place – i.e the people you are proposing helping simply outbid each other to prices they could not afford, prices the market could not bear? Do we not have an obligation to ensure this never happens again? Can you not see your current thinking is going to ensure artificially high prices once more?

The government is currently posturing about the high SVR rates the banks are charging, rightly pointing out they are the highest in Europe. Has it not occurred to any of you that perhaps one of the reasons foreign banks are not flocking to our shores to introduce lower rates may be because government policy is that mortgage security is worthless?

SVR rates are not the only percentage where Ireland is highest in Europe. In September 2013 Irish mortgage arrears over 90 days was over 15% of the total balance. The next closest country was Greece at under 5%! (Source: Moodys/DeutscheBank) Has it not occurred to any of you that perhaps one of the reasons mortgage arrears are so high in Ireland may be because government policy is that mortgage security is worthless?

We keep hearing that a raft of repossessions will result in a tsunami of homelessness. Why? Will all the repossessed properties be knocked down? Of course not. They will be sold on the open market to people who can afford to buy them. Some will buy them to live in thereby freeing up existing rental accommodation or sell another property to the market. Some will be bought by investors to add the rental stock. Those who have to move out of their repossessed houses will rent or buy a property they are able to afford. Is that so difficult to understand?

There may be some that absolutely cannot afford to rent anything and in that case the state will help them and rightly so. This is exactly what would happen in a normal functioning property market and exactly what does happen in every other developed country.

By all means encourage the bank to take the hit on any shortfall after the sale of a property – if they were not prudent enough to ensure the value of the security covered the loan then they’ll learn that lesson quickly enough in the future, and maybe that will be a further future disincentive for aggressive lending. But by allowing distressed mortgage holders to retain ownership of the property, it is grossly unfair and irresponsible to reward some individuals in society for their recklessness whilst simultaneously punishing others for their prudence.

On a micro level repossessions are an emotive issue, but on a macro level they are essential. It’s an unpalatable truth but in order to sort out or country it’s a truth that needs tackling.

Repossession will lead to devastation for some individuals and some short term sensational headlines but the lack of them will lead to major long term problems for our entire country. Beware the law of unintended consequences.

We are currently a small number of like minded individuals but we believe we represent the silent majority. We are placing this letter online and inviting those who agree with us to add their names and support.

If the government are seriously proposing state payments for problem mortgages as an electioneering tool you should crunch the numbers again. We won’t be engaging in shouty radio debates with the deluded, nor picketing mansions in Killiney, but we will vote with our feet.

Enda Kenny and Michael Noonan, we implore you to do the right thing. Allow mortgage contracts to be enforced, either the borrower pays or loses the asset; the agreement mortgage holders sign up to.

If you do this you will solve the arrears crisis, the problems in both the rental and sales property market, banks will recover, SVR rates will come down, and the majority of voters will reward you for it.

Yours sincerely,

The Irish Moral Hazard Organisation (IMHO)

fair play to you - super initiative

Good idea. My suggestion would be to lay off the emotive and personal language (e.g. re Jerry Beades) – it adds nothing to the underlying point and sounds petty.

Fair play though.

+1. Try and find the Latin term for ‘loon’. Make the letter sound more nuanced and educated!

But a good letter…captures everything

Fair comment. On the Jerry beades thing, would removing the reference to him personally work better? eg: “When blatantly self interested loons were dominating the airwaves wittering on about writing off their debts”

That was included because some feedback I had discussing with friends over the weekend was “Ah sure I tune out to all that, its like background noise, its so outrageous that the government will write down mortgages it will never happen, its all nutters who like Jerry Beades”

We thought it might be valuable to make point that essentially Enda is now singing off the same hymn sheet as Jerry Beades! Which basically shows how ridiculous the whole thing is!

I reiterate we are trying to reflect the majority of views and not specifically our own and if we’ll get more support by removing that reference more than happy to do so.

For the record. This is a political event you are engaging in.

meaning keep the personal attacks out of it?

I have to agree that you nearly lost me with your opener, not that I don’t agree with the sentiment, but I think it lowers the tone of what is a well composed piece, it makes it sound like a rant.
But that’s the only criticism, well done

Agree with what you say to a large extent.

Definitely agree with others though re personal attacks, use of the word loon etc. It lowers the tone and is counterproductive. Keep it very objective. No name calling or in any way personally attacking those whom you disagree with. Play the ball not the man. Personally I think the “new land league” types are dangerous, boarder-line psychopathic, utterly self-interested CUNTS (please excuse my language) but they are not fools - they know what they’re doing - and for your purposes personal attacks on them will get you nowhere IMO.

Also, the tone is a little condescending at times. Eg. “only the financially illiterate are unable to see…” and “Has it not occurred to any of you that perhaps one of the reasons mortgage arrears are so high in Ireland may be because government policy is that mortgage security is worthless?”

Some of it also sounds a bit like you have all the answers/this problem is really simple to solve if only everyone would do what you think should be done eg. “Again only the financially illiterate are unable to see that the supply problem would be solved by repossessed houses coming on to the market…”

Finally, do spare a thought for the many thousands who simply bought because they were utterly sick of seeing prices increase in double digit percentage terms year after year and all they wanted was a half decent house for themselves and their family. I left Ireland in 2002 because I was so sick of the bullshit but I could have easily stayed around and bought in 2006. Thankfully I didn’t. Those who did really shouldn’t be hung out to dry. They didn’t drive up prices. Those were driven by shills in the property porn media, estate agents guided only by the commission they could earn and of course banks that provided the credit to make it all possible. Personally I’d support a government initiative that would take part ownership of distressed assets and allows the mortgage holder to likewise retain part ownership and pay a proportion of their mortgage. That kind of a middle ground solution is, I think, more equitable than the extreme you so strongly disagree with - “let them keep the house and taxpayer subsidise the mortgage” and the somewhat extreme you propose - “repossess all those who fall behind in their mortgage payments”.

Thanks you to all the replies and feedback and particularly to those who signed!

We have removed the specific references to Hall and Beades as suggested so now the opening reads:

*Dear Taoiseach Enda Kenny, Finance Minister Michael Noonan and any other individual or organisation who thinks we should pay our neighbours debts:

When it was just blatantly self interested parties dominating the airwaves wittering on about writing off their debts whilst retaining their assets, those of us who believe in paying our debts and living within our means could simply dismiss them as hopelessly optimistic, only likely to be taken seriously by the financially illiterate living in fantasy land.*

Have added a line to that extent. Signatures are published at the bottom of the page but only first name and surname initial eg Mark W Dublin - do you think that is offputting?

We’re not really proposing that those who bought in 2006 should be hung out to dry, we do suggest that they be allowed to walk away from the negative equity balance if they give up the house.

great initiative -

maybe throw up a quick Facebook page to reserve the URL;

The page is a little wordy- If you could make it more readable it would help in this soundbite age

i.e. break it up into sections - like

  • Rental Market
  • SVRs

also long paragraphs like

could become something like this

A quick first reaction on the name: Irish Moral Hazard Organisation is a brilliant joke as an alternative meaning behind Hall’s IMHO. What he is peddling is moral hazard for the masses. Kudos on spotting that :slight_smile:

To avoid confusion or being seen as frivolous I’d strongly suggest another name. How about The Irish Property Forum? It’s kind of what the grouping is - a discussion forum about property, born from an internet forum but not ‘just’ an internet forum. It has echoes of the New Ireland Forum for those old enough to remember it

Brilliant initiative. I am personally delighted that someone is taking a stand and you are to be commended for doing it. Well done.

I would echo what some of the other posters are saying about use of emotive language. These things tend to be best delivered in a cold calculated manner, rather than written in anger - which you are perfectly entitled to feel though…

Really good letter overall and well written. Thanks on behalf of all of us who really want to do something about these issues but probably didn’t have the balls to do it

PS you should post it up on and Both of these sites had a lot of ranting on the issue of mortgage defaulters getting free houses yesterday

Sandra, is that you?

I think it is important to make the point that the main reason to object to these proposals is that they completely undermine the fundamental basis of the economy which depends on the fact that money is something that can be lent and borrowed with a reasonable expectation of being repaid.
I strongly applaud your efforts I agree with a lot of what is in the letter.
I feel that the arguments which take the line “why should the pragmatic pay for the excesses of the profligate?” is too easy to falsely undermine with the argument that “we bailed out the banks and developers, why should they get special treatment, you must represent the interests of the banks and developers over the interests of the people if you think the people should not be entitled to the same support”.
Countries and large institutions have always occasionally defaulted on debt. Historically there has always been severe consequences for non-payment of personal debt, personal bankruptcy is a long-standing system for this eventuality.

The world economic system is far, far from perfect but that is the way it is and it is upheld by functioning credit system where secured loans can be made at reasonable cost because they are recoverable in the event of default.

A stronger argument in my view is that a functioning economy depends on functioning credit. If secured loans cannot be recovered due to government interference in legal process and bank policy then every loan is “sub-prime”. Borrowers were reckless enough to bid property up to completely unaffordable prices in the last boom when the expectation based on past experience would have been that if you didn’t pay for it you would lose it. Reckless borrowing would be made infinitely worse by removing personal responsibility from individuals.

Personal bankruptcy is an existing system that allows people to walk away from debts they cannot pay. I would need to understand exactly what the consequences were of making recourse loans non recourse ex post facto before I could agree with the above statement. If legislation was to be introduced to allow existing financial contracts to be subsequently re-written it would have inevitable loopholes and unintended consequences.

I’d suggest posting it on the Journal and Broadsheet too if they let you.

I’m not on Facebook or twitter so the best I can do is to send around a few emails.

Yes the IMHO is deliberate! It was chosen to try and underline the ridiculousness of what he’s proposing!
Apart from the name hoping that the content of letter does not suggest we are simply lampooning people but again open to correction on that.

Point taken on emotive language. I have removed the personal attacks as on reflection agree that they don’t add anything. Regards the remaining emotive language I feel it is important to reflect a depth of feeling, but can tone it down further if majority feel that is correct.

Posted on and this morning. On politics the first replying post was some abuse by some fellow aptly named ShoutingIsLeadership! On boards, the post was deleted after about 15 mins and got banned from the Accommodation & Property forum! Though there was some support for it whilst it was there. I did get a polite email from a mod saying it was not the appropriate forum.

Nope, but we’d welcome Sandra with open arms!

I think you’re right and what we are hoping will happen is that after getting a number of signatures to indicate there is some support that we can open the site up to publish arguments and open letters from people like yourself.

I’ll ping it over to Journal and Broadsheet if we can get a few hundred signatures, i.e less likely to be dismissed as ranting of a madman!

Thanks again for all the replies, the feedback is helpful and the support is encouraging.

Great initiative, well done, hopefully this can gain some traction on other sites/media where the empty vessels on the debt forgiveness side are given free reign.

the twitter share button should be changed too - a description is missing

Ideally you want some fake outrage from David Hall - being denounced “from the pulpit” is great publicity

I know it was deliberate, but it is confusing and in my opinion (ihmo…) it undermines the seriousness of the point you are making.

We are opposed to moral hazard, not representatives for it!

EDIT- sorry, didn’t realise you were so advanced with domain registration etc. Crack on so, and best of luck!