Measures to relieve mortgage holders in arrears ‘lacking detail’

Long-awaited relief measures for borrowers struggling with debt and mortgage holders in arrears have been criticised as belated, timid, and lacking in detail.

The Government plans are intended to give borrowers easier terms on which to agree debt deals with banks. An expanded mortgage-to-rent scheme will also give mortgage holders more options to walk away from unsustainable debt. Borrowers will also be offered further support services, including from the budgeting service Mabs.

Changes agreed by the Cabinet yesterday will in future allow courts overrule banks on debt deals. Insolvency deals will be reviewed by courts and bank objections overturned in favour of borrowers. This will allow greater numbers of people write down debt. Only 129 personal insolvency deals have been agreed with banks so far this year.

The Government yesterday also signed off on an expanded mortgage-to- rent scheme to allow more owners to give up their homes and become debt free but remain under their roofs as social housing tenants. The value of homes and their size has been increased, to allow more owners apply for the scheme. In Dublin, the threshold for home values is being raised from €220,000 to €350,000.

It remains unknown what the threshold will be for homes outside of the capital, how much funds overall will put into the new initiatives, and the expected number of homeowners who will avail of the mortgage scheme or the new relaxed insolvency terms. The stronger support from Mabs for borrowers has also still to be outlined.

However, both the new insolvency terms and expanded rent scheme were yesterday declared “belated and timid”.

Fianna Fáil finance spokesman Michael McGrath said the Coalition for years had denied banks were blocking insolvency deals and had claimed it was “unconstitutional” to interfere with their veto. Mr McGrath claimed vague solutions were now being proposed as the Government parties were heading into a general election.

“Over the last four years the Government has denied the existence of a problem in relation to how the banks are allowed to dictate the pace and nature of how mortgages are restructured. A huge amount of unnecessary distress has been heaped on families as a result of the failure to address this issue.”

Deputy McGrath also said it was disappointing that the solutions did not include a new independent office to oversee mortgage disputes.

Party senator Thomas Byrne said he had written to the High Court asking that all repossession cases be halted until the new measures and terms are introduced.

The insolvency changes will not be legislated for possibly until July.

Sinn Féin claimed the new mortgage measures were a massive U-turn and an admission of failure by the Coalition.

“Now with an election within months they have put together a package that has been needed for years,” said the party’s Peadar Tóibín.

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