Debt Forgiveness Campaign

Blue Sky Financial is actively compiling a database of mortgagors who bought property at the peak of the property market who are now experiencing huge negative equity, financial difficulty in repaying the level of mortgage they have or just simply wonder what is the point in paying a mortgage of c.€3000 a month for a property that could be rented for €1000 a month.

If enough people register on our database then we will start an active campaign to make debt forgiveness a reality. We need at least 5,000 mortgage holders to register before we have worthwhile pressure group.

What exactly will Blue Sky Financial do for mortgagors?

1. We will demand proper debate, protocol and procedures to be put in place so that mortgage debt can be reset to acceptable levels in certain circumstances. This may require write downs of up to 60% in some cases. We are recommending that mortgages be written down to a maximum of 130% of current market value. For example if your home is now worth €180,000 then your mortgage should be reduced to €234,000.
2. We will also demand a long term interest only option where it is required by mortgagors.
3. We will demand a reasonable extension to the mortgage interest relief scheme.
4. We will demand that if a family home is surrendered or repossessed then no further legal action can be taken against the mortgagor, i.e. no judgement registered.
5. We will demand the immediate establishment of an independent mortgage arrears and negative equity solution board comprising representatives from mortgagors as well as banks and government.

Consider the following example

Couple A bought a house in 2006 for €400,000. Today it is worth €180,000. Their mortgage repayment is approx €2300 per month. They can rent a similar property for €800 per month so by continuing with their mortgage repayments they are paying €1500 per month more for accommodation than they need to. Thats €180,000 over ten years which clearly makes no financial sense. The lender, as we see it, has two options.

Option A	Option B
Repossess and sell couple A's home	Write down mortgage to 130% of current market value = €180,000 x 130%
Selling Price = €180,000	New Mortgage Value = €234,000
Less Costs = €20,000	Less Costs = €1,000
Total Revenue Recovered = €160,000	Lender retains profitable mortgage on balance sheet
Loss to Lender = €240,000	Loss to Lender = €167,000

Should first time buyers only register?

Absolutely not. Anyone who holds a mortgage on their family home or principle place of residence should register however if you are not in negative equity or arrears, there will not be a benefit but by registering you are showing support for the campaign and those families who are threatened with the loss of their home.

Sure the banks won't do anything!

They won't, as long as mortgagors remain fragmented which is what they want. They continually say that each situation must be handled on a case by case basis but we believe that a blanket policy directive is required in order to solve this problem NOW, not in a year or two or five years time. The coming together of thousands of mortgage holders will represent a hugely formidable force - and one that can have a massive positive effect on our economy.