Lawyers urge Government to block repossession of homes

CAMPAIGNING lawyers have urged the Government to step in to stall or prevent the repossession of family homes in the same way they bailed out the banks.

The network of Free Legal Advice Centres (FLAC) said bailouts should be available for families with serious payment arrears in the same way that the €400 billion rescue packaged was laid on for the banks.

Their call comes as evidence mounts of increasing numbers of mortgage-holders falling into arrears because of the recession, and growing numbers of lenders beginning court proceedings seeking to repossess homes where debts have piled up because of the recession.

FLAC barrister Paul Joyce said lenders were being given a safety net while vulnerable borrowers — including the taxpayers funding the banks’ rescue package — were left exposed.

“Some of these borrowers may be numbered amongst the 23,500 or so employees made redundant in the first eight months of 2008. Others will have seen their small businesses collapse with catastrophic consequences,” he said. “If emergency legislation can be introduced to prevent the collapse of the banking system, then it can be introduced to prevent the eviction of taxpayers. If a court can see that a borrower cannot repay because of a change in financial circumstances beyond his or her control, the court should have a right to put a moratorium on any right of the lender to enforce its security.”

Mr Joyce also called on the Government to give courts the power to set aside debts where reckless lending was involved. In the case of subprime lenders — those who offer high interest loans and mortgages to people turned down by the main banks and building societies — borrowers are often able to self-certify their income without any checks into their ability to repay.

“People were lent money in dubious circumstances where their ability to repay was at best cursory and at worst non-existent, so that, regardless of economic circumstances, problems were always likely to occur.”

MABS — the Money Advice and Budgeting Service — said it was seeing a “considerable” increase in the number of people seeking help with mortgages, with the added difficulty that subprime lenders were often unwilling to listen to MABS making representations on a borrower’s behalf.

“We find the majority of high street banks will negotiate but, the subprime lenders can be quite difficult to deal with,” said MABS spokesman Michael Culloty.

Irish Banking Federation spokesman Felix O’Regan insisted repossession was a “last resort” for its 70 members, but it was vital that customers signalled their difficulties early and did not ignore letters, demands or court summonses.

MABS can be contacted on 1890 283 438 and FLAC can be contacted on 1890 350 250.