Gilmore’s view of mortgage crisis far from reality

Tánaiste and Labour leader Eamon Gilmore told the Dáil that progress is being made in tackling the mortgage crisis and the new insolvency legislation “will enable people to put their mortgage crisis behind them and to get on with the rest of their lives”.

The reality:

* According to the latest Central Bank statistics, there are 97,874 mortgage holders with a total value of €18.6bn in arrears by more than 90 days.

* The Personal Insolvency Act allows banks to claw back additional money from debtors who sell their homes at a gain any time up to 20 years after they enter an arrangement.

* Brian Walker, a barrister who has trained PIPs, has warned that about 40% would be turned down at the first assessment phase as they have not been engaging with banks in the mortgage arrears resolution process, a prerequisite for being accepted onto a personal insolvency arrangement.

Mr Gilmore said the Central Bank has set targets requiring the main mortgage lenders to offer durable solutions to mortgage holders more than 90 days in arrears.

“The revised code of conduct on mortgage arrears was published by the Central Bank in June and the Department of Finance continues to engage with lenders,” he said, under questioning by Sinn Féin deputy leader Mary Lou McDonald.

The reality:

* The only reason that banks agreed to stricter guidelines to deal with households more than three months in arrears is because of pressure from the troika — not the Government.

* The heads of the main banks were criticised by an Oireachtas Committee for inflating their debt resolution figures.

Mr Gilmore said the Government has made the mortgage crisis a priority.

The reality:

* It avoided the looming crisis for years and has been accused of pandering to the banks.

It took the suicide of a former resident of Priory Hall and public backlash before the Government acted — even though families had been complaining for years.

Mr Gilmore said Central Bank figures to the end of June indicate that the stock of personal mortgage restructures was around 79,000 at that stage — 53% of these restructured accounts are not in arrears which indicates that the banks are taking some early measures to address mortgage difficulty.

He said 1,800 split mortgages were in place; 12,600 accounts had a term extension restructure; and a further 12,000 accounts had their arrears capitalised — so progress was being made.

The reality:

* Nigel Nagarajan from the EU Commission, and a former troika representative in Ireland, said this week, contrary to the experience in other countries, mortgage arrears were still rising in Ireland despite a stabilisation in unemployment last year.

* Alan Dukes, who is a public interest director with IBRC, recently said that the banks will need to be recapitalised because of the extent of the crisis

Mr Gilmore said the reason the Government established the personal insolvency service was “that the mortgage problems and arrears problems that many households and many families have in this country will be solved”.

The reality:

* Advocacy group New Beginning has warned that the new targets for the banks — which means banks must now conclude arrangements with 15% of customers in arrears over 90 days by the end of this year and 25% of customers by the end of next March — will see a rise in repossessions

Mr Gilmore said the steps taken will help households resolve their mortgage difficulties.

The reality:

* Only 37 people have so far been trained as personal insolvency practitioners (PIPs) — the people charged with assessing the insolvency applications — and there are large parts of the country not covered.

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