55,000 ‘struggling’ to pay mortgages

THE number of homeowners struggling to pay their mortgage has risen to 55,000 and banks are not doing enough to help them with their difficulties, according to the Minister for Social Protection Joan Burton.

As new figures from the Central Bank reveal a 10% rise in cases of mortgage arrears in the past three months, Ms Burton has called for an “early warning system” to identify those falling into difficulty.

A spokesman for the Irish Banking Federation said the figures, published today, show the problem has become “more challenging”.

The group welcomed news that a further 63,000 mortgages have been restructured by banks saying “it shows borrowers and lenders are engaging”.

But Ms Burton hit out at lenders, saying: “I don’t think the banks and the mortgage institutions are actually engaging sufficiently with people.”

She said they need to reach out and talk to the growing number of people in mortgage distress: “The banks, at the moment, have been concentrating among their senior management on trying to save the banking institution. Now they also have to concentre on reaching out to the people that they lent the money to in the boom,” she told RTÉ radio.

Ms Burton said last week that proposals for debt forgiveness should be considered. But her suggestion was shot down by her party leader Eamon Gilmore.

Yesterday, she said the problem has to be dealt with “on a case by case basis”.

She said banks should set up an “early warning system” with dedicated staff and phone lines to talk to customers about their mortgage difficulties.

“If you let people get deeply into debt, it becomes much more difficult to help them get out of debt,” she said. “Everyone who has a need has to be able to approach the institution that provided them with a mortgage.”

Today’s mortgage figures come as debate intensifies over the whether there needs to be a introducing a debt forgiveness scheme.

The cases of mortgage arrears are growing by 20,000 a year and 7% of home loans are in arrears of more than 90 days.

“I think every family in Ireland knows of some friend of family member who has a mortgage, who has lost their employment or their salary has been cut and they’re finding it hard going,” Ms Burton said.

Independent presidential candidate, Mary Davis, said while it’s something that has to be decided by Government, banks “have a particular responsibility to be reasonable and flexible with people and families in difficulty”.

The issue has also come to the fore because of a letter in the Irish Times on Friday from an unemployed man in Tralee, MP Mac Domhnaill, who said he couldn’t feed his family because of mortgage repayments.

“Today I have had nothing to give my children only bread and cereal... I dread what each day will bring. The wolf that I have been keeping from the door has finally moved in,” he wrote.

Local councillors and the St Vincent de Paul have so far been unsuccessful in tracking down the letter writer.

Ms Burton said that “he may have additional entitlements” and advised the man to contact the community welfare officer in Tralee or the Society of St Vincent de Paul.

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