Homeowners should be given mortgage reprieve, says Labour

HOMEOWNERS should be given a two-year reprieve from mortgage payments before moving to repossess their home, the Labour Party has suggested.

The party also called for the establishment of a National Home Mortgage Service (NHMS) to advocate on behalf of those struggling to repay their debts.

Labour’s housing spokesman Ciarán Lynch said the code of conduct the banks were signed up to did not offer enough protection. He said the 12-month hiatus would not see families through and a longer wait would encourage lenders to restructure loans rather than seeking foreclosure.

Mr Lynch told the Dáil during a Private members’ motion homeowners should not have to renegotiate with the banks themselves. Instead the NHMS would be set up as an intermediary to analyse the situation of both the loan, the lender and the borrower.

The party’s plan would ensure those who owe money to the banks were not reneging on payments to take advantage of moratoriums when they had the ability to meet their obligations.

Mr Lynch said it would be given legislative backing to work along the lines of the Monetary Advice and Budgetary Service, but the ideal would have to be a plan which kept families in their properties.

“There will have to be balancing of rights between the conflicting interests. In all cases one envisages there would have to be repayments on an ongoing periodic basis by the borrower who remains in possession,” he said.

Responding to the motion on behalf of the Government, Junior minister Martin Mansergh said banks were already compelled to handle genuine cases compassionately and additional measures were not required.

He said it was a complex area which the Government was trying to deal with both through its dealings with the banks, budgetary policy and funding for MABS. He pointed to the fact that the main banks had repossessed just 20 homes this year as proof this was effective.

“It is a priority of the Government to ensure as far as possible that difficulties in relation to mortgage arrears do not result in legal proceedings for home repossession. Home repossession should be and generally has been the last resort for the lender,” he said.

But, Mr Lynch said homeowners had fallen victim at the end of game played by the banks, developers and Fianna Fáil. He said this began with developers purchasing overvalued land. Banks would then provide loans and sell this on international markets and this inflated prices for their own purposes.