A Moratorium on mortgage payments is only the first step for home owners in difficulty

Respond!, Ireland’s largest social housing provider agrees with yesterday’s statements by the Master of the High Court that “legal and equitable” solutions are needed to resolve the “avalanche” of repossessions expected before the courts in the coming months. Respond! Housing Association is assured by Judge Edmund Honohan’s assertion that banks cannot expect to have it all their own way.

Following on from Judge Honohan’s remarks that the long-term interest of the borrower must be protected, Respond! insists that the twelve month moratorium on house repossession will do little to help those facing the fear of repossession of their homes. The housing charity maintains it is simply delaying the inevitable for many families. Instead, Respond! Housing Association claims a moratorium is only the first part of the solution. The second part of the solution requires the Government to put in place a Repossession Arbitration Committee (RAC) that will re-evaluate mortgages to the current market value.

Respond! Spokesperson John Hannigan claims this latest Government measure to try and protect families at risk of repossession will not help people in the long run.

“Allowing people build up mortgage arrears for one year will do little to help them keep their home. If a family or individual is struggling to repay their mortgage each month, the likelihood of them being able to repay twelve months hence is unrealistic. People are falling into mortgage arrears for a variety of reasons including the high cost of monthly repayments and unemployment. There is no option to sell their home due to negative equity and the economy is unlikely to improve over the next twelve months to allow them to return to work. The only reasonable step is to try and reduce these high repayments.”

Respond! is calling for an independent Repossession Arbitration Committee (RAC) to be set up. This committee would comprise of representatives from the financial sector, the Department of Finance and a consumer organisation. It would be the responsibility of RAC to examine each mortgage arrears case individually and then decide what the real equity value of the mortgage is and how best can the individual repay it.

“Reckless lending practices by some financial institutions is partly to blame for this crisis,’ said John Hannigan. ‘We are calling on the Government to be brave and fix the anomalies that exist in our society. It is time to bail out families and workers, not bankers and developers.”

“Almost 150,000 people have been made unemployed since this time last year. What these people need is reassurance that their homes will not be taken from them” concluded Hannigan.