Bid to tackle mortgage crisis shot down

The Government has shot down an opposition bid to tackle mortgage arrears, despite more than 1,380 families facing the prospect of losing the “roof over their heads” this week alone.

The Fine Gael-Labour coalition said it will reject Fianna Fáil’s bill attempting to force banks to cut deals with people in difficulty instead of taking their homes, despite a growing public outcry and concerns banks are getting tougher with struggling households to take advantage of the strengthening property market.

According to the figures, which were detailed by the New Beginning group and revealed on UTV Ireland last night, 1,380 mortgage arrears cases are due to go before district courts this week, the equivalent of 276 a day.

They include: 62 cases in Cork, 131 in Ennis, 218 in Limerick, 100 in Dublin, 58 in Naas, and 45 in Carlow.

Separate figures given to Fianna Fáil finance spokesperson Michael McGrath by Finance Minister Michael Noonan show some counties have mortgage loan repayment default levels as high as 19.05%.

According to the rates, which are based on a “limited” unspecified number of banks examined by the Central Bank, Longford (19.05%) households are worst affected. Others include Cavan (17.07%), Meath (16.97%), Donegal (14.79%), Kerry (11.68%), Limerick (11.63%), with the lowest level in the country in Cork (10.21%) still showing one in every 10 mortgages examined are in arrears.

Despite the situation, Taoiseach Enda Kenny and Government TDs last night told the Dáil they will not support Fianna Fáil’s bill to force banks to cut more deals with distressed owners because of legal issues and concerns the bill could result in “constitutional challenges” by the financial firms.

Speaking during leaders questions yesterday before the first night of a two-day debate on the opposition bill, Mr Kenny said the situation can be better tackled by encouraging banks to inform mortgage holders of the State’s insolvency service, which attempts to broker deals but is currently under-used.

While accepting 37,000 mortgages are two years or more in arrears and the difficulties this is posing, he said it is not possible to remove a bank veto on insolvency deals allowed under the current rules and which the Fianna Fáil bill is pushing to see introduced.

A spokesperson for Tánaiste Joan Burton said she is “broadly supportive of the principles” of a different bill put forward by Labour TD Willie Penrose which is seeking to reduce the amount of time a person spends in bankruptcy from three years to one, but did not comment on the current proposal being discussed.

However, hitting out at the position in the Dáil debate last night, Mr McGrath accused the Government of ignoring the fact that this morning families are “staring in the face losing the roof over their heads”.

He said the current insolvency service is trying to work while having “both its hands tied behind its back” due to the bank veto on deals.

The Government position was decided after the latest cabinet meeting yesterday afternoon, with a senior spokesperson saying the view is based on the fact the Fianna Fáil bill could “lead to a legal challenge and possibly a constitutional challenge”.