‘No fairness in current system’

Despite repeated acknowledgement that mortgage arrears is a serious issue for both the Government and the Central Bank, neither has made an appropriate response to the scale of the problem that will help people struggling with debt. We need an intervention that will even the balance between lender and borrower.

In the first line of its quarterly bulletin on mortgage arrears, there is a welcome admission by the Central Bank that the extent of repayment difficulties and its associated implications is a major policy concern for the Government and the bank. So it should be. Apart from minor slowdowns in the rate of new households getting into arrears, the number of mortgages in very serious arrears of more than one or two years is depressingly on the increase.

However, although returns should have been with the Central Bank since July, this report is silent as to whether the bank is satisfied that lenders have met their Jun 2013 targets for offering sustainable long-term solutions to borrowers. While it details new restructure arrangements, it notes over half of these will merely extend the time during which the borrower would make less than the full monthly payment on the mortgage. While that is useful for short-term problems, it has not made inroads into the overall mortgage debt problem over the last two or three years when it was the main answer from lenders.