Following the publication of the latest mortgage arrears data from the Central Bank, Fianna Fáil Spokesperson on Finance, Michael McGrath TD has welcomed the continued reduction in mortgage arrears but expressed frustration at the high number of mortgages still in arrears for over two years.
Deputy McGrath commented, “It is undoubtedly positive that the number of mortgages in arrears continues to reduce. It is worth noting that the pace at which the number of mortgages in arrears is falling appears to be slowing. This is a sign that we are getting down to the most difficult mortgage arrears cases. Nearly 28,000 family home mortgages are still in arrears by over two years.
“Since Quarter 4 in 2017, only 1,000 family home mortgages in arrears by over two years were addressed. At this rate it would take around 27 years to address these mortgage arrears cases. Clearly another solution is required to deal with these cases.
“Fianna Fáil brought forward legislation that would establish a Mortgage Resolution Office and would deal with these older arrears cases in a fair and transparent manner. This legislation would also put Mortgage to Rent on a legislative basis.
“The Government’s policy to date is based on the belief that the sale of loans to private equity funds will solve the problem. While this will reduce the proportion of NPLs on the balance sheets of banks, but it will not solve the underlying problem. It is clear that the Mortgage to Rent scheme needs urgent reform. The number of completed transactions is paltry when compared to the scale of legacy mortgage arrears cases.
“What is evident from the data is the fact that the number of loans owned by non-bank entities has increased significantly. Given the current Government policy, I would expect this trend to continue. Legislation to regulate vulture funds put forward by Fianna Fáil has just passed final stages in the Seanad this week and will be soon signed into law. This legislation will regulate the key decision makers for the first time.
“Another interesting part of the data is the fact that lenders are currently in possession of 3,267 properties. Given that we are in the midst of a housing crisis where supply is significantly behind the demand, it is staggering that lenders are simply sitting on over 3,000 residential properties. This is unacceptable and must be stopped.
“It is crucial that reforms are brought forward to deal with legacy arrears cases. Fianna Fáil has put forward proposals that would deal with these cases in a fair and transparent manner for lenders and borrowers alike,” concluded McGrath.