BANKS denied today that they were running away from the mortgage crisis.
The Irish Banking Federation (IBF) insisted its members were keeping to deadlines for dealing with the mortgage mess imposed on them by the Central Bank.
But IBF spokesman Felix O’Regan admitted that the pace of progress has been “frustratingly slow”. But this was due to the complexities involved and the fact that every case was different, he told RTE’s ‘Morning Ireland’.
He said that at the start of the year all of the banks received a very detailed communication from the Central Bank setting out a timeline of activity. Banks had until May to submit detailed mortgage arrears resolution strategies.
Once the Central Bank approved those strategies, the banks then had to pilot various resolution products and processes.
Between May and September the banks were testing these resolution products and then began the roll-out after September, Mr O’Regan said.
The IBF was responding to stinging criticism of its members by Central Bank regulator Fiona Muldoon. She accused banks of adopting a “wait and see” approach on the mortgage crisis.
For many borrowers who were behind on repayments banks were failing to recognise that the debt simply would not be fully repaid.
“What is it that we are waiting for on mortgage arrears? The hope for an economic recovery, hope that house prices will come back, hope that the personal insolvency act will handle the issue for you? This is the stuff of denial,” she said.
Today the legal rights group FLAC (Free Legal Advice Centres) welcomed comments made by both Central Bank and Department of Finance officials that seemed to indicate a tougher stance being taken on the failure of banks to adequately tackle mortgage debt.
However, FLAC stressed that strong words must be followed by concrete action.