Homeowners are under immense stress too

31 March 2011

"On foot of the bank 'stress tests,' there continues to be a lack of focus on struggling homeowners"

The latest round of stress tests on Irish Banks and financial institutions is only part of the picture. There continues to be a lack of focus on the difficulties being endured by tens of thousands of homeowners across the country, whose unmanageable and unsustainable mortgages of today will be the banks' difficulties of tomorrow.

FLAC recognises the financial problems within the banks and financial institutions but is concerned that the needs of homeowners, who are facing their own form of financial turmoil, are still being overlooked.

FLAC Director General, Noeline Blackwell said today: "At FLAC we are concerned that people must not be pressurised into accepting settlements that are improvident and unsuitable, created merely by banks anxious to make amends for what can be now seen as unwise and imprudent business activity.

"There is a clear commitment made by the new Government in the Programme for Government that the emphasis in tackling the mortgage crisis will be squarely on keeping people in their homes. Other commitments are to examine the Mortgage Interest Supplement - as recommended by the Expert Group on Mortgage Arrears as long ago as last July - and to introduce a two-year moratorium on repossessions of modest family homes where honest efforts to pay are being made.

"While these solutions will go some way to help struggling homeowners, others are needed without delay. People with difficult and unsustainable mortgages are living day-to-day with no idea whether they will be able to keep a roof over their heads. A proper structure for holistically dealing with mortgage and other personal over-indebtedness is urgently required and once implemented will provide some measure of certainty for many people ."

FLAC would also like to emphasise that the Code of Conduct on Mortgage Arrears, which was designed to provide a structured way for Banks to deal with customers experiencing mortgage difficulties, still applies irrespective of the financial difficulties being experienced by lending institutions.




Editors' notes:
1. FLAC's Factsheet explaining the new revised Code of Conduct on Mortgage Arrears is available on the FLAC website - or for direct download click here.

2. 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 and supports a network of evening FLAC clinics around Ireland. FLAC has produced research reports in the area of personal debt: 'An Ends Based Means' and 'To No One's Credit' in 2003 and 2009 respectively.