Hard year looms for homes in arrears

David Hall of the Irish Mortgage Holders Organisation

The Irish Mortgage Holders Organisation warns that 2014 could be “particularly rough” for homeowners in arrears due to the Central Bank’s failure to put a transparent arrears policy in place.

David Hall of the Irish Mortgage Holders Organisation says there is clear evidence of banks targeting homeowners in arrears whose properties are not in negative equity.

“It is predatory behaviour and there is a massive demographic of people in their 50s and 60s who fit this bill as they released equity in their homes or went guarantor for a son for daughter. They are going through mental torture every day. This is a demographic who are under huge pressure but nobody is looking at this sensibly,” he said.

“What is the long-term cost of rehousing these people through rent allowance or through local authority housing? What is the mental health cost of this? There is nobody joining up the dots here. Instead there has been five years of lost opportunity as the Central Bank has not put definitive, transparent policies in place, especially around cases where there is equity in the home”.

One woman in her late 50s has spoken of how she feels particularly at risk of repossession as her home isn’t in negative equity.

Ten years ago, Maire’s (not her real name) husband had a booming construction business. He employed more than a dozen people, including a number of their children; their mortgage was paid off and they hadn’t a worry in the world.

“It was a business that he had built from nothing, it was growing and growing, but then we moved house and took out a new mortgage. We didn’t worry about remortgaging as we were doing very well, but then all of a sudden it stopped and I mean stopped,” she said.

Her husband, Jack hasn’t worked in five years.

“He’s not well, it has taken a toll on him,” she says.

“The great problem is our age. My husband is now in his 60s. By the time the construction sector picks up, my husband will be too old to work and so they want to get at our house as even though it’s only worth half of what it once was, it’s still worth at least €250,000, so they won’t be left with any negative equity,” she says.

For the first year after they couldn’t make full repayments, Maire and Jack’s bank, Ulster Bank, allowed the Cork-based couple to make interest-only repayments. However, they then deemed their mortgage unsustainable and requested they hand over the property.

Maire appealed and spent up to six months waiting for a decision as the bank sought further information.

“The waiting and wondering and is awful. You’re crying constantly, and then kicking yourself for ending up in this situation and then you’re drained from it all, and then you’re crying and fighting,” she said.

The end result was another six-month agreement to accept interest-only repayments. In January, the same appeals process will restart again as the latest six months agreement is up again.

“I often don’t want to go to bed, I don’t want to face the next day. What will happen to us in the long term? We know they want to get rid of us as they can sell our house quickly and not be saddled with any more outstanding debt. But the €50,000 we’d get out of the sale? That won’t pay rent for long? If it wasn’t for our family helping us out so we can pay the interest only I don’t know where we’d be,” said Maire.


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