Three point plan needed from Government to address mortgage arrears crisis

9 March 2015

FLAC press release                                                          09 March 2015

A three point plan needed from Government to address the mortgage arrears crisis says FLAC

Realistic, humane and sustainable solutions to the problems of those in distress with mortgage arrears on their family home will depend on a three point solution according to legal rights organisation FLAC (Free Legal Advice Centres).

If the government is serious about tackling mortgage arrears on family homes in a way that will keep people in their family homes, FLAC says that they will have to provide:

  • Adequate financial and legal advice in a timely way to people who are trying to negotiate restructure of their mortgage debt;
  • An independent service which can objectively assess  whether a sustainable mortgage restructure is possible and what that it might be; and
  • A radical reform of the mortgage to rent scheme in order to allow those with recognisably unsustainable mortgages to ensure reasonable housing.

According to FLAC’s director Noeline Blackwell ‘this organisation has long predicted that a rise in repossessions was bound to result when lenders have an absolute discretion to decide whether a loan is sustainable or not..  The Central Bank’s Code of Conduct on Mortgage Arrears has proved to be ineffective as a counterbalance and even when it is working perfectly, it is only a tick-box exercise.  A real effort to keep people in their family homes will need a much stronger commitment from government to solve this poisonous problem in our society’.

She said that ‘it is entirely wrong that poor over-indebted people have been expected to go in to negotiate the roof over their own heads with lenders on their own unless they can get assistance from the under-resourced MABS, organisations like ourselves or other advocacy organisations or from private professionals working pro-bono.  There is a crying need for effective support for these people as they negotiate with lenders.’ She says that such a system should be funded by lenders.

Having focused on making it easier for lenders to deal with their problematic debt for some years, now the focus is turning on the borrowers.  FLAC’s Senior Policy Analyst Paul Joyce notes that the State’s own figures show that the number of re-possession applications on family homes is rising inexorably and will continue to do so as lenders deal with those cases where arrears and difficulty has become more entrenched.

 ‘While in some senses, this focus should have come much earlier, there is now great capacity for action because the size of the most difficult mortgage arrears cases is settled.  We know that about 38,000 households have been in arrears for more than 2 years and this is the only category of mortgage arrears that is increasing in the last number of reports from the Central Bank. This means that the extent of the problem can be quantified.”   FLAC does not accept that all of these cases are unsustainable mortgages but it is going to take action on all of the three points suggested to sort them out, according to the organisation.

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Editors’ notes:

  1. FLAC (Free Legal Advice Centres) is a human rights organisation which exists to promote equal access to justice for all. FLAC is an NGO that relies on a combination of statutory funding, contributions from the legal professions and donations from individuals and grant-making foundations to support its work.
  2. FLAC offers basic legal information through its telephone information line (1890 350 250) and free legal advice through its network of 80 volunteer evening advice centres – more at  It also campaigns on a range of issues including consumer credit, personal debt, fairness in social welfare law, public interest law and civil legal aid. FLAC has issued numerous analyses and policy statements calling for a fairer mortgage arrears resolution process.
  3. Updates on FLAC’s policy work and comment on personal debt issues are at
  1. The Central Bank      figures on mortgage arrears, restructures and repossessions, issued on 6      March 2015 confirms that there were 11,424 repossession applications for      principal dwelling houses in 2014. They also show that the number of      possession orders granted, houses repossessed and voluntary surrenders all      increased in the last quarter of 2014.
  2. You can download      FLAC’s most recent  analysis of progress      on the resolution of mortgage arrears, issued in January 2015 at