Recommendations on Mortgage Arrears

Date: 06/07/2010
Posted by: Darragh

I'm delighted to see the detailed recommendations made today in the interim report of the Expert Group on Mortgage Arrears and Personal Debt.

These recommendations, which have been fully supported by the Taoiseach and the Government, are very welcome and should be implemented without delay.

The report says lenders should stop charging penalty interest or arrears charges to borrowers who are engaging with the banks to resolve their difficulties; that all lenders must develop a Mortgage Arrears Resolution Process and Framework; and the Department of Social Protection should make a number of changes to the Mortgage Interest Supplement Scheme.

I think the recommendations will go some way to help a lot of people who have fallen behind in their mortgage payments because of difficult circumstances they find themselves in, through no fault of their own. They need assistance and I'm delighted to say that the reform of the Mortgage Interest Supplement Scheme as recommended - to deliver a more equal and simplified scheme to get a greater balance between the lender, the borrower and the State - has already been approved by the Cabinet.

The time has long since come for the banks, which are being supported by the taxpayer, to show compassion to those in difficulties. The Chairman of the Group Hugh Cooney has made it clear he wants improved communications and consistent policies applied by lenders to borrowers. He is also encouraging all lenders to take immediate steps to implement the recommendations that relate to them. I personally want to see that done without any delay.

The Group is now moving on to look at broader structural changes such as modifying loans and the options for borrowers with unsustainable mortgages. This final report is expected to be completed by the end of September. This is very difficult but very important work and I wish the group well in their efforts to find fair and appropriate solutions for struggling homeowners.