The Association of Personal Insolvency Practitioners said banks and vulture funds have given the “two fingers” to the Government while pushing forward with a repossession spree.
Its chairman, Eugene McDarby, said despite the Government’s efforts to address the mortgage arrears crisis by introducing the Abhaile scheme, banks are still refusing viable restructuring proposals designed to keep people in their homes.
The Abhaile scheme, launched last October, offers free financial and legal advice, with a priority on those most at risk of losing their home.
It is run jointly by the Money Advice and Budgeting Service and the Legal Aid Board.
“We feel it’s time to identify and challenge the banks and vulture funds who have chosen to give Government the two fingers while pushing forward with their repossession spree which will wreak havoc on the lives of Irish citizens and taxpayers for generations,” said Mr McDarby.
“Instead of respecting government policy and working with debtors and PIPs [personal insolvency practitioners] to achieve viable long-term sustainable solutions, the pillar banks and vulture funds continue to vote against insolvency arrangements preferring repossession and surrender of family homes.
“Insolvency arrangements provide better outcomes for banks than would be the case if a borrower goes bankrupt or the property is repossessed.”
Mr McDarby claimed the bailed-out banks and vulture funds are more interested in quick fixes and overlook the fact that, in most cases, the loss of the family home results in homelessness and a “social crisis on an unprecedented scale”.
“Banks continue to pump money into repossessing homes despite the best efforts of distressed borrowers, PIPs, and Government to identify and implement viable solutions that will keep people in their family homes,” he said.
“Currently, there are more than 35,000 family home mortgages in long-term arrears with an average of three people living in each of these properties. These 105,000 people are not being provided with sustainable alternative arrangements.”
Mr McDarby said Croke Park would not be big enough to hold the number of people in danger of losing their homes if “banks and vulture funds are not brought to heel”.
He claimed “the traitorous behaviour of banks in refusing to entertain viable alternative payment plans means the [Abhaile] scheme cannot have the desired effect of keeping people in their family homes”.