‘Mortgage policy plan would let banks off the hook’

Potential Government plans to keep struggling mortgage holders in their homes by bailing them out with taxpayers’ money have been criticised by the opposition for effectively letting banks “off the hook”.

Fianna Fáil finance spokesman Michael McGrath made the claim as it emerged up to 1,000 mortgage holders are facing the prospect of being thrown out of their homes after court cases this week, with Central Bank figures suggesting 31,000 people could be facing the same fate.

The Coalition is considering addressing the burgeoning crisis by offering taxpayer-funded financial support to those in need.

As part of the potential measure, which was first mooted by the Irish Mortgage Holders’ Association last month, local authorities or the Department of Environment could put money aside to cover the debt owed by mortgage holders.

In return for striking the deal, the plan would also see the banks receiving the money being forced to agree more reasonable repayment schedules with mortgage holders to ensure a similar situation is not repeated.

However, while the mooted policy is being debated at length within Government, Mr McGrath has claimed it will simply let the banks he says are responsible for causing the crisis off the hook, as taxpayers will be effectively asked to “bail them out” for drawing up bad deals.

“The State has to be conscious of the many thousands of families who are meeting their mortgage repayments through great sacrifice,” said Mr McGrath. “Any scheme providing direct support would have to be very carefully constructed.

“Such a policy is letting the banks off the hook again, it is a direct transfer from the taxpayer to banks which have already been handsomely capitalised at the same taxpayers’ expense.”

The political row comes as up to 1,000 more mortgage holders will, in the next five days, face court appearances that could end with their homes being repossessed.

The Central Bank has suggested 31,000 people are now being threatened with repossessions by financial institutions, the latest of which will occur in Cork, Tipperary, Waterford, and five other counties this week.

Distressed mortgage holders group New Beginning has informed local courts it will send lawyers to assist all individuals facing repossessions this week.

However, it has faced criticism after suggesting already struggling mortgage holders may have to pay a €150 fee to the group to receive the vital advice.

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