TDs back Gilmore in ‘no’ to debt relief

LABOUR backbenchers rolled in behind party leader Eamon Gilmore after he rejected suggestions by fellow Cabinet members for a wide-scale debt relief scheme for distressed mortgage holders.

A split emerged this week among Labour Cabinet members over continued calls for some sort of debt forgiveness system for troubled borrowers.

While Social Protection Minister Joan Burton and Housing Minister Willie Penrose both indicated support for consideration of a universal relief scheme, the Tánaiste ruled it out.

Mr Gilmore’s dismissal of a universal state aid scheme for troubled homeowners was echoed by party backbenchers yesterday.

But Labour TDs did stress the need for some protection to be introduced by the Government, including measures to stop home repossessions.

Galway East TD Colm Keaveney said a “one size fits all” approach to the mortgage crisis was unlikely to work.

He said: “The fact is that there are people doing well who don’t deserve debt forgiveness and there are people struggling who do require help. We need a more targeted approach in terms of how we deal with the very real problem of mortgage debt.”

He said measures were under way to help borrowers including a longer moratorium for people facing repossession, changes in mortgage interest relief and reform of personal bankruptcy laws.

Dublin Central TD Joe Costello also supported Mr Gilmore’s rejection of calls for a blanket scheme, adding: “I think we must look at the very basic principle that we have to keep the roof over the heads of people, the heads of families, there should be no way that this government would see the homes of people being foreclosed on and taken away from [them].”

Economist Morgan Kelly last week said €5 billion to €6bn would help end the mortgage crisis. It emerged last night that a draft working paper online by Mr Kelly claimed that there were 11,000 mortgages of over €500,000 taken out between 2006 and 2009 with an estimated value of €9bn.

He said it was possible that many of these homes were buy-to-let mortgages. It could also be suggested, he said, that interest only mortgages went almost exclusively to property investors.

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