By Elaine Loughlin
The Master of the High Court has described advice given by the Taoiseach to a person facing repossession as “a sick joke” and said the Government is “misinformed” about the situation impacting many families.
Edmund Honohan has written a bill to give greater protections to families who are faced with losing their homes.
It would set up a cooperative system to allow for the purchase of distressed mortgages which could then be rented back to the mortgage holders.
Mr Honohan said the new regulations would discourage vulture funds from getting involved in the market.
“It sets a high bar for repossessions and it’s a bar which really the vulture funds will not be inclined to jump. I have people coming into my court on a daily basis wanting to hold off, or stave off repossession.”
Out of frustration he asked some of these people to write to the Taoiseach to ask him where they could go to get mortgage to rent as a solution.
“They came back and they handed me a letter which they received from the Taoiseach in which he said, and I quote: ‘The Abhaile service launched in 2016 is a national mortgage arrears resolution service, the aim is to help mortgage holders in arrears to find the best solution and keep them in their own homes’.”
Mr Honohon claimed this answer was “completely wrong”.
“It is a sick joke that the Taoiseach would write to this man ... and tell him this is where he should go.”
Speaking on RTE radio he claimed Abhaile is “merely a voucher for €200 worth of legal advice before you go into the circuit court”.
“Why is it that the Taoiseach’s office is so misinformed about the situation on the ground that they are apparently unable to formulate a reasonable policy to cope with the wave of repossessions that is about to break?”
He said the cooperative system, outlined in his bill, is widely used in Europe with around 10% of houses in Norway being rented through this mechanism.
“If community funding can be made available to a group which is able to umbrella purchase these houses, then that’s the way forward. It’s a question of ethical funding on a large scale, what somebody has described as a friendly vulture.”
Mr Honohan said there are around 15 bills “sitting” in the Oireachtas and he had put all these together to allow for cross-party approach to the housing crisis.
He said the issue of moral hazard, which could see people strategically defaulting, had been addressed in the bill as anyone deemed able to afford to pay their mortgage would not be included in the measures.
“The bill I have drawn up obviously says we should not help people who can afford to pay or should have paid.”
Fianna Fáil TD John McGuinness, who is to bring forward the bill on behalf of Mr Honohan, said it would also extend and reconfigure Abhaile to act as a mortgage resolution agency.
“We are watching PTSB put the loans together, they are going to now go to auction and the likelihood is that these will be sold to vultures. Once sold to vultures the owner of the distressed mortgage is likely to lose their home.”
This story first appeared in the Irish Examiner.