# Why are local authorities providing mortgages?



## Velazquez (14 Mar 2012)

From reading the discussion on affordable housing / shared ownership and the levels of arrears that are apparently building for local autorities, it is seriously questionable if local authorities have or ever had a legitimate role in mortgage lending. 

If people were unable to obtain a mortgage from a bank in the good old bad old days when they were prepared to lend to just about anyone, this suggests to me that those people simply could not afford to own a home. 

Local authorities were effectively a State sponsored sub-prime lender but unlike most sub-prime lenders, their rates were lower than those available in the market.


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## Chris (15 Mar 2012)

You are absolutely right. And what is most baffling is that politicians and the public blame the financial crisis on the bank lending practices, but they are oblivious to the fact that the banks were doing exactly what politicians and the public wanted them to do, i.e. lend to as many people as possible and as much as possible. 
People say there was a lack of regulation and oversight; I would go so far as to say that if there had been 100% regulation and control of banks by governments, they would have done *exactly* the same as the banks did.


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## bugler (16 Mar 2012)

It is/was a natural extension of the belief in Ireland that everyone has an entitlement to own a house. Why should the fact you don't have a deposit, saving record, or a history of financial prudence stand in the way of buying a house? You're entitled to it! 

The Home Choice Loan scheme is well worth a mention to. If you're launching a scheme in which applicants must have been refused a mortgage from two private lending institutions as a pre-condition, you really should be asking questions of yourself.


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