Fianna Fáil hits out over mortgage arrears

Fianna Fáil has said Government fears that its new mortgage arrears bill is not constitutional are “ill-founded” and a convenient excuse to block the legislation.

The party’s finance spokesman, Michael McGrath, who is bringing the bill, is seeking to remove the veto banks have on those seeking to stay in their homes. He says the legislation is geared at keeping people in their homes.

Mr McGrath said there is an inherent unfairness in how banks and homeowners are being treated when it comes to mortgage resolution, and that this is leading to families unnecessarily losing their homes.

The bill was debated in the Dáil last night and, in advance of the debate, Mr McGrath said the current system is not working.

“At present, there are over 76,000 family home mortgages in arrears, with 41,000 of these mortgages in arrears of a year or longer,” he said.

“Fianna Fáil strongly believes that it makes for good social and economic policy to keep families, who are making a genuine effort to meet their responsibilities, in their home.”

Mr McGrath, a TD for Cork South Central, said that at present, if a mortgage holder in arrears cannot reach agreement with their lender on restructuring their mortgage, they may choose the insolvency path. However, the lender has been given an effective veto by the Government in this process.

“We know from the latest statistics available from the Insolvency Service that 43% of applications for personal insolvency arrangements (involving secured debt such as a mortgage) were unsuccessful in [the first quarter] of 2017 because agreement could not be reached with the creditors,” said Mr McGrath.

“The option, available since late 2015, of appealing this veto to court is not working effectively. Cases can take up to a year to be dealt with, and the lenders are contesting the appeals with enormous legal resources. The result is that home-owners in arrears are left hanging in limbo and they don’t know where they stand.”

The Government has opposed Mr McGrath’s bill on the grounds of being unconstitutional, meaning it is unlikely to proceed.

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