Mortgage restructures ‘can help economy’

Taoiseach Enda Kenny has urged banks to speed up restructuring mortgage arrears to give hope to thousands of families and businesses struggling with debt.

Mr Kenny said Irish banks were bailed out at a cost of €64bn to Irish taxpayers — the equivalent of over €35,000 for every household in the country.

His comments came as the Government prepares to unveil quotas for state-covered banks on the number of distressed mortgages to be worked out every quarter.

The Government will announce a policing of bank deals on arrears tomorrow, including sanctions if they fail to reach quotas.

Mr Kenny, speaking on a visit to Britain, talked about the resurgence of the Irish economy and said banks had to play a bigger part.

“Irish banks need to accelerate the work-out of mortgage arrears and other non-performing loans, giving confidence to investors and visibility and hope to the tens of thousands of families and small businesses in debt difficulties,” he said.

He spoke of the burden on Irish households and blamed the previous Fianna Fáil-led government for the “onerous” bank deal. He also criticised the European Commission and ECB, saying continuation of the bank bailout was one of the requirements of Brussels and Frankfurt in agreeing to the bigger state bailout, to prevent panic in eurozone markets.

Meanwhile in Limerick, Finance Minister Michael Noonan called for action on distressed mortgages in the interests of the country.

“You can’t have 100,000 families in a small country not participating in the growth of the economy and they can’t participate if they are burdened with debt,” he said, adding that the mortgage system would collapse without the threat of repossession. Repossession was a last resort but some borrowers had been “drifting into arrears and settlements have to be made”, he said.

Increased options for owners will include “warehousing” loans, partial write-offs, and property seizures.