Fianna Fáil Spokesperson on Finance Michael McGrath has said today’s statistics on mortgage arrears provide clear evidence that the government’s approach to dealing with the crisis is simply not working and that the so called ‘sustainable solutions’ being offered by banks are dictated by what is in the banks’ interests rather than the mortgage holder.
Deputy McGrath said, “The mortgage arrears crisis continues to worsen with the publication of each quarter’s figures. Despite government claims, there is in fact no slowdown in the rate of deterioration of the situation. We have now passed the point at which many commentators predicted the rate would peak with no sign that the situation will improve in the short term.
“The Mortgage Arrears Resolution Targets programme was launched amid much fanfare in March but the fact that we have only had 344 split mortgages implemented out of almost 100,000 mortgage arrears cases is further evidence that the banks’ thinking hasn’t really changed at all. Their sole motivation appears to be preservation of their capital base and to put off dealing with the problem for as long as possible. They have been aided in this by the government allowing them to pass off sticking plaster arrangements as sustainable solutions.
“While the arrangements allowed under the Mortgage Arrears Resolution Targets programme allow the banks too much leeway, it is completely unacceptable that we have yet to see an update from the Central Bank on meeting those obligations or definitive targets for conclusion of restructuring arrangements.
“We need to urgently change direction on this issue. Economic recovery and the well-being of society necessitate a far more radical approach than we have seen to date. The government has tried the option of the allowing the banks to drive this process and this has resulted in the disastrous position we are now in. If policy doesn’t change, we can expect more of the same when future arrears statistics are released.
“I firmly believe the need for an independent mortgage resolution office is compelling. As part of the new Insolvency Service, an independent mortgage resolution office would have the power to impose a binding solution to a mortgage in arrears. We also need to consider introducing legislation to set out clearly what represents a sustainable mortgage solution including a legal entitlement for distressed borrowers who meet certain strictly defined criteria to be offered a sustainable long term solution involving a split mortgage or a debt for equity arrangement.”