New Measures to help homeowners in arrears

John Browne T.D. would like to welcome todays decision to assist homeowners in mortgage arrears by introducing measures to assist them with their struggle to repay loans. The protection of the family home is a major priority for families.

The final report with recommendations of the Expert Group on Mortgage Arrears and Personal Debt Expert Group, chaired by Hugh Cooney, was published today. It should be noted that a revised Code of Conduct on Mortgage Arrears is being finalised by the Central Bank and will be issued shortly.

The main recommendations are:

• A Deferred Interest Scheme should be introduced for borrowers who can pay at least 66% of the interest. This would give borrowers up to 5 years to get back on their feet. Lenders representing more than half of the market have agreed to take part in a scheme along the lines of the Group proposal.

• Lenders should consider facilitating borrowers in negative equity who wish to trade down to a more affordable home.

• Where a mortgage is unsustainable, assessment for social housing should be done before repossession takes place.

• A mechanism should be put in place to allow repossessed borrowers to remain in their homes for a time, allowing the housing authority time to source appropriate accommodation.

• The Group is not recommending debt forgiveness, nor a State funded Mortgage to rent scheme.

• New bankruptcy legislation should be introduced.

• A statutory non-judicial debt settlement system should be established

• The time limit for discharge of debt should vary in line with the total value of debt.

Supports already in place

• Almost 18,000 families this year are receiving direct help through mortgage interest relief. The eligibility criteria have been extended so that more people can qualify.

• Mortgage interest relief has been refocused on those who bought their homes at the peak of the market.

• Where borrowers are co-operating reasonably and honestly with lenders,

• Lenders must wait at least twelve months before applying to the courts to commence enforcement of any legal action on repossession of a primary residence.

• The Irish Banking Federation has agreed that its members will hold off on legal action against borrowers who are in difficulties provided they honour mutually acceptable arrangements.

• Lenders must explore all viable options with borrowers and must examine alternative repayment measures.

• Lenders have stopped imposing penalty interest or arrears’ charges on borrowers who are taking part in the Arrears Resolution Process.

• All Lenders must have a Mortgage Arrears Resolution Process and Framework and an appeals process

• Banks cannot require borrowers to change from a tracker mortgage to another mortgage type.

• We are reforming the laws on bankruptcy

MABS

• The Money Advice and Budgeting Service (MABS) assists people who are over-indebted and need help and advice in coping with debt problems.

• There are 52 independent MABS companies operating the local MABS services from 65 locations throughout the country, with national support provided by the MABS NDL.

• In addition, the MABS National Telephone Helpline is available from 9am to 8pm Monday to Friday and the MABS website can be accessed 24 hours a day at www.mabs.ie. 90% of clients presenting to MABS are assisted through the telephone helpline, which provides assisted self-help to ensure clients take steps to assess and address their situation.