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Mortgage arrears

The Seanad discussed the increasing level of mortgage arrears.  In a debate introduced by the Minister for Finance, Michael Noonan, the senate was told that 76,600 accounts were now more than 90 days in arrears, or 10.2% of primary residential mortgages, up from 6.3% in 2011 and 4.1% in 2010 (Seanad Eireann, Debates, 3rd July 2012, 483-506).  A number of measures had been taken in response, such as the Central Bank code of conduct and the Keane report.  Whilst the government would not adopt an approach of blanket debt forgiveness, it wanted to ensure that people remained in their own homes.  The government had published the Personal Insolvency Bill which would establish an insolvency service, for which the post of director designate had been advertised.  They had launched a mortgage-to-rent scheme for low income families whose mortgage situation was untenable and for whom there was no prospect of improvement.  Some 60 cases were now going through this process and 100 families would avail of the scheme this year.  While the surrender of home ownership was not an easy option, with ownership transferred to an approved housing body, it provided security and continuity for families.

 

Darragh O’Brien (FF, labour) took the view that the figure of arrears was, if we took into account those more than 30 days behind, much higher and closer to 15%.    Some people were extremely distressed and he quoted figures from the Irish League of Credit Unions showing that 50% of families had less than €100 a month to spend once all the bills were paid.  This issue affected not just those with severe mortgage difficulties, but others just keeping their heads above water.  The Bill was stacked against the borrower, there was no appeals process and the mortgage-to-rent scheme was an absolute con and he would never advise anyone to go down that route.  Jillian van Turnhout (ind, Taoiseach nominee) criticized the procedures for qualification for mortgage interest supplement, which required a restructuring plan to be in place 12 months first, meaning that people could be left without any state assistance for up to 18 months.  Ivanna Bacik (Lab, Dublin University) agreed that the mortgage-to-rent scheme would not be suitable for everyone, but it was vital to have some form of final safety net.

> Local authorities and mortage arrears: Dail Eireann, Debates, 26th June 2012, 231-2