The Government’s financial advice service for people in mortgage arrears is an “embarrassment” and should be closed down immediately, according to a leading mortgage rights campaigner.
David Hall of the Irish Mortgage Holders Organisation made the call after it emerged that just 200 people, or less than 1% of those in arrears, had used the Government’s Independent Financial Advice Service over the last 12 months.
His comments also came in the aftermath of a prediction by ratings agency Fitch that 20% of mortgages in arrears will end in repossession.
Mr Hall pointed out that, using Central Bank figures of 141,000 people in arrears, more than 27,000 could lose their homes. However, he said there would be an element of “selective repossession” by the banks. He said houses in certain parts of the country would be less attractive to repossess and sell, so the banks would be more inclined to seek a different restructuring option with the mortgage holder.
The Department of Social Protection admitted the review of the Independent Financial Advice Service had “highlighted a number of issues, including a lack of awareness and low take-up of the service”.
Minister Joan Burton appeared to lay at least a part of the low take-up on the banks. She said submissions received by the review claimed the service was not being offered to all eligible borrowers.
Ms Burton also said that, to drive awareness, mortgage-holders will get a comprehensive leaflet on the service when they receive their annual mortgage statement.
However, Mr Hall said the scheme was an embarrassment and should be closed. He said investment should be made in giving people assistance on the frontline in a centralised approach rather than leaving them to rely on organisations like his own.
He urged the setting up of a statutory standalone debtors agency to protect the interests of debtors, provide a one-stop shop for them and not have his organisation and many others “having to run around helping debtors as best we can”.
“Banks have been supported, banks have been protected, now the debtor needs some protection,” he said.
© Irish Examiner Ltd. All rights reserved