A chara, – As we all look forward to celebrating an awful year coming to an end, my eye is cast toward what 2013 might bring. In particular, I find myself asking whether we can keep affording our mortgage payments?
Over the past six months I have been working with my lender to arrive at an agreeable solution to sort out arrears and restructure our payment for next year. Over this time we took the advice of the lender to pay a certain amount and provide it with information on our means. All this was done in a timely manner and to everyone’s satisfaction.
To my amazement, I received a call this week from my bank, to say that management has refused a restructure based on the information supplied.
I pointed out that we did exactly what was asked of us, but this fell of deaf ears. In any event, we have agreed to remain with our current payments and continue to review on a monthly basis until, hopefully, circumstances change.
Then I considered this position a little closer and found myself asking: why are the banks so reluctant to work with borrowers?
The answer is in how they restructure the loan books. The bank will put arrears on top of my principle loan and re-calculate, then arrive at a new monthly payment over a new term. This sounds all well and good, until you calculate the profits the banks are making in such arrangements.
No wonder my bank’s management board are not too keen to facilitate me. Is this profiteering, I ask myself. Maybe, but at best it’s taking advantage of the vulnerable in our society.
Banks are continually telling us they want to shoulder some of the burden, but in fact they are making larger profits for themselves. Yes, the world economy collapsed and yes, someone has to pay, but the banks lent to people without due care, almost shoving money down naive throats.
If we are to move forward in any meaningful way, then the banks have to shoulder an equal share of the problem. This would mean reducing the amount owed on the loan and where restructures are required, taking out any further profits the banks will accumulate. – Yours, etc,