Homeowners to receive extra protections under FF Mortgage Bill – McGrath

Fianna Fáil Spokesperson on Finance, Michael McGrath has said that there is currently an inherent unfairness in how banks and homeowners are being treated when it comes to mortgage resolution, and that this is leading to families unnecessarily losing their homes.

Deputy McGrath was speaking ahead of the 2nd stage debate of his party’s Mortgage Arrears Resolution (Family Home) Bill 2017, which will be take place this evening in Dáil Éireann.

“At present, there are over 76,000 family home mortgages in arrears, with 41,000 of these mortgages in arrears of a year or longer. Fianna Fáil strongly believes that it makes for good social and economic policy to keep families, who are making a genuine effort to meet their responsibilities, in their home.

“At present, if a mortgage holder in arrears cannot reach agreement with their lender on a restructuring of their mortgage, they may choose the insolvency path. However, the lender has been given an effective veto by the government in this process.

“We know from the latest statistics available from the Insolvency Service that 43% of applications for Personal Insolvency Arrangements (involving secured debt such as a mortgage) were unsuccessful in Q1 of 2017 because agreement could not be reached with the creditors.

“The option – available since late 2015 – of appealing this veto to Court is not working effectively. Cases can take up to a year to be dealt with, and the lenders are contesting the appeals with enormous legal resources. The result is that homeowners in arrears are left hanging in limbo and they don’t know where they stand.

“The key reform needed in our view is to allow an independent office to make the final decision in respect of the restructuring of a mortgage in arrears. This would provide an end point in a process that currently seems endless.

“Under our proposals, the independent Mortgage Resolution Office, having consulted with the lender and considered the full financial picture of the borrower, can choose from a suite of restructuring options in order to make the mortgage on the family home sustainable.

“We look forward to this Bill being debated in the Dáil and we hope others will join with us in supporting this vital reform to help individuals and families struggling with the mortgage to remain in their home,” concluded McGrath.