Distressed mortgage holders sticking heads in sand - mortgage adviser
Published 03/04/2014 | 02:30
DISTRESSED mortgage holders are sticking their heads in the sand because they believe a "magic solution" is on the way, according to the head of the Irish Mortgage Holders' Organisation.
David Hall warned that these homeowners are avoiding tackling their debt, but their hopes for a solution are likely in vain.
Addressing the Joint Oireachtas Committee on Finance, Public Expenditure and Reform yesterday, Mr Hall (pictured) said there has been an "abysmal failure" in relation to ensuring people have protection from lenders.
"The House, the Oireachtas and the Government have failed miserably," Mr Hall insisted, adding that unsecured lenders had also "run amok".
"People are not engaging with their lenders, they're not engaging with organisations because they're sitting at home saying 'something's coming'.
"It's not. If something comes along the line that benefits people, great. But for now, for those people who are at home in difficulty and distress, who aren't sleeping tonight, who are in difficulty, they need to engage," Mr Hall told the committee.
He said bankers have "abused mortgage holders" by calling them strategic defaulters "without any evidence".
His organisation, the IMHO, tries to engage with lenders on behalf of clients.
The smallest mortgage debt owed by a client of the IMHO is €26,000 and the largest is €52m, according to Mr Hall.
He said the IMHO has 4,500 active files.
He claimed Bank of Scotland, which no longer offers retail services here, Danske Bank and Bank of Ireland have been the "most difficult" to deal with.
The IMHO has secured 325 deals with AIB on behalf of clients, including one Cork family who got €195,000 written off their debt, having borrowed €478,000. They also got to remain in their home.
Noeline Blackwell, the director general of Free Legal Advice Centres (FLAC), also criticised the banks for what she claimed was an unprofessional approach.
"The banks are sending out unqualified, inexperienced people who really only have a job of getting through a number of files in a particular time and reporting back to somebody who's really only interested in the figures at the end of it.
"There is no capacity to have a proper conversation," she told the committee.
Over 3,000 people contacted FLAC last year, she said, adding it was impossible to get banks to "grapple with the reality", because her organisation ends up dealing with "different people" all the time.
"What's needed is proper support going through the system," she said.
Carol Dunne of money advisors MABS suggested that rather than sponsoring local football teams, banks should provide access to credit and "fair, complex debt resolution".