Blocking repossessed home sales criticised

Blocking the sale of repossessed homes will only prolong the problems for indebted borrowers and does not serve society as a whole, according to the Finance Minister Michael Noonan.

A series of protest at receivership auctions has recently prompted Allsop to declare it will no longer put repossessed family homes up for sale.

The director of the Irish Mortgage Holders’ Association, David Hall, said the move would have “significant implications” for helping people in debt to remain in their family homes.

But Mr Noonan told the Dáil last night he was concerned about reports “that suggest that banks may be presented with obstacles to selling properties legally in their possession — either by way of a voluntary arrangement or upon the conclusion of a legal process and a judgement by the court.”

He said the Government’s approach is to help people stay in their homes as long as possible. But where efforts to find a mortgage solution have failed or are not viable, “it is unfortunately the cases that, in some instances, the ultimate resolution will involve the sale of the property”.

He said it was “difficult to see that unsustainable cases can be better served by prolonging and extending the circumstances and the indebted situation of the borrower”. Impeding the ultimate sale of the property and having “homes in a transient state” would restrict the normalisation of the property market.

“In my view the wider interest is better served by enabling these limited cases of sale following repossession to proceed.”

The minister was responding to a motion tabled by Fianna Fáil on how to address the mortgage arrears crisis. It proposes more consistent rules to be applied by banks to split mortgages and the establishment of an independent mortgage resolution office.

It also proposes steps to ensure the cost of engaging a personal insolvency practitioner will not prevent people from engaging in the new insolvency regime.

FF finance spokesperson Michael McGrath said: “Legal letters and the threat of repossession cannot be regarded as a sustainable solution. We need a robust regime overseen by the Central Bank with published targets, published progress reports and a clear definition of what is appropriate for banks to put on the table in the resolution process.”