Banks have ‘legal rights’ says Justice Minister

Banks have legitimate rights when it comes to dealing with people trapped in mortgage misery, a Cabinet minister has insisted.

Justice Minister Frances Fitzgerald also signalled Fine Gael opposition to Labour’s push to cut bankruptcy terms to one year.

Defending why it has taken the Government so long to bring in an element of an independent review in the restructuring of mortgages, Ms Fitzgerald insisted the interest of lenders needed to be considered as well.

Ms Fitzgerald denied banks had been given the upper hand as 38,000 mortgages slipped into arrears of two years or more.

“It is not a question of the upper hand, it is a question that every side here has rights,” said Ms Fitzgerald. ”I am not taking the side of the banks by any means, but legally there are rights there on both sides.

“Not enough people have been engaging, particularly that 38,000. Let’s remember when we discuss this issue that 85% of all people with a mortgage are up to date and paying their mortgage, sometimes with difficulty because of [the] recent economic situation.

“100,000 have had their mortgages restructured, one of the reasons for that is because we have an insolvency service, because we have an alternative.”

Ms Fitzgerald also indicated that the three year bankruptcy term could remain in place after a review is published in July.

“We have already reduced it from 12 years to three years, and many countries keep it at three because it is not necessarily the way to go, but we will have a report in July,” Ms Fitzgerald said.

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