Senior officials at the Department of Finance decided to discard the counsel of more junior colleagues when they raised questions about 100 percent mortgages and other initiatives that put the property market in potential peril.

The Irish Times got a bird’s eye view of some 2005 papers for speeches and Dail question-time that show initial concern over certain mortgage practices.

However, later versions of the papers show that the angle was changed by senior officials to give a more positive spin on the property market and downplay a prediction that inflation would rise in 2006.

“This type of material is not appropriate or suitable for a ministerial speech, It is positively alarmist in tone in some areas . . . Similarly, I don’t see why we want the minister [Mr. Cowen] to make a statement to the effect that house price inflation may continue to accelerate in 2006. This is not even accurate in terms of the department’s budget-day forecasts,” read one document, according to the Irish Times.

“In addition, the minister is not going to devote two paragraphs of his speech [to an extract] from an ESRI report. If the Minister were to make this speech, one can only imagine what the market reaction might be.

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“For future use, you might work on a one-pager which refers to the strong performance of the sector and lists the underlying fundamental economic factors underpinning housing demand.

“What can also be included is a carefully worded and nuanced message on the need for all actors in the sector to avoid taking unnecessary risks or something along those lines.” In another memo, a query was raised about a sentence in a proposed speech from Mr. Cowen reacting to the ESRI report: “A soft landing is now in prospect [for the housing sector].”

The Department of Finance also made public other papers under the Freedom of Information Act that shed light on the thorny subject of 100% mortgages.

A September 2005 examination of this type mortgage resulted in a prediction that they might have an inflationary effect, but senior finance personnel overruled advice from the Department of Environment about intervening in the situation.