Saturday 24 June 2017

Noonan weighs in again on mortgage debt promising help

Fionnan Sheahan Political Editor

FINANCE Minister Michael Noonan today pledged that the government will do all it possibly can to help people in mortgage difficulties to stay in their own homes.

Pointing out that Ireland does not have a culture of repossessions and that only 58 repossessions had been ordered by the courts to date, he said: “We want as many people as possible to retain their own homes.”



But the Minister said on Morning Ireland that there had to be a distinction between those who can’t pay and those who won’t pay.



Confusion over the Government's solution to the mortgage crisis grew last night with a senior minister appearing to back US-style debt write-offs for homeowners who lose their houses.



A fortnight of conflicting coalition signals to tackle the problem continued -- but struggling homeowners are no closer to receiving relief.



Coming back from holidays, ministers pointed out the banks have enough money to write off some mortgage debt after being bailed out by the taxpayer. Yet the Government stressed it was not advising a wide-ranging scheme of mortgage write-offs.



Taoiseach Enda Kenny said the Government was "acutely aware" of the mortgage difficulties -- but is not yet ready to take any decisions.



And a Cabinet minister said he felt if people lost their houses, the outstanding debt should then be written off. At the moment, banks continue to chase the homeowner for the outstanding debt -- even after the house has been repossessed.



This is in contrast with the US model where a homeowner can hand back the keys and walk away. Transport Minister Leo Varadkar said there are lots of people struggling to pay their mortgages, and are just about managing, "and they shouldn't have to pay for those who can't or won't".



The minister appeared to back a writing off of outstanding debts, once the house is taken back.



"But, at the same time, if people are losing their houses or having their houses repossessed, I don't think it's fair that the negative equity or the debts, if you like, should follow them," he said.



The youngest minister at the cabinet table said it was important to have a scheme worked out, "to know who it is going to apply to, who it won't apply to and who is going to pay for it".



Mr Varadkar said the Government needed to know what people had in mind when proposing large scale debt write-offs.



He agreed with the Government stance of ruling out "blanket debt forgiveness".



The cabinet discussed the mortgage debt crisis at its first meeting after the summer break but kicked any policy decisions to touch until an expert group reports back on options in a month's time.



The Irish Independent revealed yesterday that struggling homeowners who make deals with lenders to reduce their mortgage payments face paying tens of thousands of euro in extra interest charges.



Finance Minister Michael Noonan however said the Government would deal with the difficulties faced by struggling homeowners. Despite new figures showing 70,000 householders have now restructured their mortgages, Mr Noonan said it was a manageable problem, and added the funding put into the banks by the taxpayer factored in the losses to come from mortgage defaults.



"So we're aware of the difficulty for some time, but of course because we recapitalised, the capital is in the banks to allow the banks write off some of that debt," he said.



But a government spokesperson stressed the banks would still have to deal with individuals on a case-by-case basis.

Irish Independent

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