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Distressed mortgages: avoiding homelessness

Dessie Ellis (SF, Dublin NW) raised the issue of distressed mortgages (Dail Eireann, Debates, 19th January 2012, 266-8).  According to him, there were now about 100,000 distressed mortgages, with over €1bn arrears owed, the average being between about €17,000 and €21,000.  The director of the Free Legal Advice Centres had reported that the number had increased by 55% in the past year.  He drew attention to local authority policy whereby people who surrendered their home were not accepted as in housing need and placed on a housing list and were barred from the rental accommodation scheme, rent supplement and voluntary housing.  The only way to be deemed in housing need was to have their home repossessed through the courts.  The government must explore how to deal with cases such as these and avoid people being forced to go to court and become homeless.  People had been put under much pressure and stress, which may have led to suicide or attempted suicide.


Responding, the Minister of State at the Department of the Environment, Community and Local Government, Jan O’Sullivan, spoke of the government inter-departmental working group on mortgage arrears report of October 2011 and the steering group set up to implement it.  She agreed that a situation in which a distressed household had to make itself homeless in order to be assessed in housing need made little sense.  The new local authority social housing assessment guidelines now required a local authority to consider whether a mortgage had become unsustainable, which meant that an assessment of needs could be carried out once difficulties could be assessed.  She wanted local authorities  to be pro-active and engage with people when they were in difficulties before the point of being on the street.  A local authority could now make a needs assessment once the mortgage was deemed unsustainable and repossession proceedings instituted. Perhaps the local authorities need to be reminded about this.