Senator Sean Barrett introduced a bill into the Senate this week to in effect restructure the Irish mortgage market along Danish (aka rational) lines. Stephen Kinsella on IrishEconomy has a post on it where he notes that the Minister nixd the bill on essentially four grounds
1. We are not, nor were we ever, Denmark.
2. Changing wholesale to this system has risks, most of which I won’t go into here, but the Danes give defaulting households 6 months and we’d really like that to be longer, say a year.
3. Changing to this system would imply loans at 80% LTV, most banks are at 92% LTV, this would make it more difficult for first time buyers.
4. We’re in the middle of negotiations on the various capital requirements directives, this could throw a spanner in the works with the EU.
The debate, which was quite good, is reported here. Note that Constantin G and myself in February mused at the Croke Park Conference that something along these lines was desirable. Its interesting that the system can take in good ideas but not it seems accept them.
- the text of the bill Mortgage Credit (Loans and Bonds) Bill 2012
- the Mortgage Bill Original Explanatory Memorandum
- A BIS Review r_qt0403h and a DELG review danish_housing_dublin (1) of the danish mortgage and housing market