Struggling Homeowners’ Needs Must be Prioritised
1 September 2010
Wednesday 1 September 2010
Today the Financial Regulator has released quarterly figures which once again reveal a disturbing increase in the number of households in serious difficulty with their mortgage repayments. Almost one in 20 homeowners is now three or more months in arrears. Over two thirds of these are in arrears of over six months. This represents an alarming increase of 13 per cent since the end of March 2010.
FLAC believes that serious remedial action is long overdue to assist these households, many of whom are suffering as a result of the risky lending practices that prevailed during the boom years.
Noeline Blackwell, Director General of FLAC, said:
"Today we hear that almost €23 Billion has been spent so far, on bailing out Anglo Irish Bank. Surely it is now time for the Minister for Finance to give due consideration to the thousands of struggling homeowners who are collectively in arrears to the tune of €7 Billion Euro.
Although the figures in relation to court proceedings to repossess properties have remained static in this quarter, the worrying trend of homeowners surrendering their properties has continued. FLAC has grave concerns about this practice. Ms Blackwell said that many people contact FLAC's services looking for a way out of their difficulties. However, she emphasised that handing back the keys may not solve the borrower's problem. There may remain a shortfall on the mortgage where the property is worth less than the amount borrowed. There may also be difficulties accessing social welfare payments and local authority housing where there has been a voluntary surrender.
FLAC noted that both the Expert Group on Mortgage Arrears and the Law Reform Commission are both due to make their final recommendations shortly to address the urgent problems of inadequate debt resolution structures in the Irish legal system.
Ms Blackwell concluded, "These should be implemented as a matter of priority with all the relevant agencies working together to put in place a comprehensive national strategy to address the mortgage arrears and debt crisis."
1. FLAC (Free Legal Advice Centres) is an independent human rights organisation which works to promote equal access to justice for all. It runs a lo-call telephone information line giving general legal information to the public and it supports a network of evening FLAC clinics around Ireland where volunteer solicitors give first stop legal advice to people who need it and cannot afford legal representation.
2. The latest Arrears and Repossession Figures have been compiled and released by The Financial Regulator and may be accessed at http://www.financialregulator.ie/press-area/press-releases/Pages/LatestArrearsandRepossessionsFiguresshow387ResidentialPropertiesRepossessedin12months.aspx