Blatant discrimination against borrowers must be tackled at Committee hearings on mortgage arrears

The Oireachtas Finance Committee hearings this week with the chief executives of the main banks will be an opportunity to examine the failings in tackling the mortgage arrears crisis facing thousands of borrowers across the country, according to Fianna Fáil Spokesperson on Finance Michael McGrath.

Deputy McGrath commented: “These hearings will be crucial in getting to the real truth of where we are in the mortgage arrears crisis that is crippling thousands of families across the country and continues to be a major drag on our economic recovery.  One of the main issues to be resolved is the inconsistency by which resolutions are being applied to distressed borrowers across the banking system.  For months Fianna Fáil has been calling on the Minister for Finance and the Central Bank to intervene to remove the dramatic differences in offers being made by different banks to borrowers in arrears.

“In recent weeks and months we have seen reports of some banks agreeing to dozens of debt write down arrangements with borrowers while those whose loans are with other banks continue to pay interest on the shelved portion of a split mortgage.  We cannot have a situation where whether or not a borrower in arrears is allowed to keep their home or not essentially comes down to a game of poker.

“There are also huge discrepancies over what criteria the banks use to determine what a sustainable mortgage is.  The current situation allows for a bank to deem a borrower as having an unsustainable mortgage when in fact their position could be rescued. At present the borrower does not have a basis on which to challenge this. The banks should in each instance publish the criteria which they are working to or the Central Bank should publish criteria for the entire sector.

“We have seen time and time again where both the government and the Central Bank have taken a ‘hands off’ approach on the mortgage arrears crisis and we are not seeing any meaningful efforts by the banks to place borrowers in really sustainable solutions.  Every month that this crisis drags on it damages our economic recovery.  However it is also causing a much deeper social crisis.  There are thousands of people across the country in homes they can no longer afford to keep with debts they can no longer afford to service.  How long must they be asked to wait before the Government and the banking system accept that reality?

“This week’s hearings at the Finance Committee with the heads of Ulster Bank, Permanent TSB, AIB and Bank of Ireland offer an important opportunity.  We need each of them to lay out in clear terms, once and for all, the measures they are taking to deal with their customers in arrears.  We need to get a real understanding of how the solutions being applied vary from bank to bank and how much progress is really being made.  I am not prepared to accept that the solution available to each borrower depends solely on which bank their loan happens to be with.  Pot luck is not good enough.  The banks, the Government and the Central Bank need to understand that equality of treatment for all borrowers is the very least we expect in the mortgage debt resolution process.”