Govt Must Call In Banks As Mortgage Arrears Crisis Deepens

The increase in the number of people in mortgage arrears continues to accelerate as the Government drags its feet on introducing necessary reforms to Ireland’s personal insolvency regime, according to Fianna Fáil Finance Spokesperson Michael McGrath.

Deputy McGrath was commenting on media reports over the weekend and today that the latest mortgage arrears statistics due to be published by the Central Bank over the coming days will show that over 10% of residential mortgage holders are in arrears of 90 days or more.

Deputy McGrath stated: "At the end of March 2011, the mortgage arrears rate was 6.3%. The figure for the end of March 2012 is expected to exceed 10% - representing an increase of 60% in just twelve months. The acceleration in the mortgage arrears crisis over the past twelve months has not been matched by Government action. In fact, the uncertainty surrounding the Government response has contributed to the worsening situation.


"The figures due to be published are expected to show that around 80,000 borrowers are more than three months in arrears. Another 35,000 or so borrowers have restructured their mortgages and are not in arrears. These figures do not include thousands of other borrowers who are in arrears of less than 90 days. All in all, this is a full blown crisis and requires a decisive and concerted policy response from Government.

"The Government has already delayed the publication of the Personal Insolvency Bill and it now seems likely the new debt settlement system will not be up and running until 2013. Fianna Fáil’s bill to establish a non-judicial debt settlement system dealing with mortgage debt and other forms of personal debt passed second stage in Dáil Éireann last October but unfortunately the Government has not moved on it since.

"In addition, the Government should summon the banks to a meeting and demand answers as to how they are dealing with the arrears crisis. The Central Bank has been critical of the slow response to the crisis by the banks. The Government should be taking the lead in dealing with the crisis but so far this leadership has been sadly lacking."

(CD)