Wednesday 7 December 2016

Councils in homeloan debt crisis

Published 14/03/2010 | 05:00

Nearly half of local authority home loans, mostly taken out by low-income families, are in arrears, shock new figures reveal.

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The claim was made by Labour TD Jack Wall in the wake of a study commissioned by him into the state of the local authority home loan scheme.

The loans were provided by county councils to low-income families to allow them get a foothold on the property ladder.

But, in yet another example of the devastating effects of the rise in unemployment, the study revealed that 43 per cent of loans nationwide were in "severe financial difficulty''.

When Mr Wall contacted his own county council, officials said they were not "at liberty to revise the loan arrangements''.

The Labour TD says a provision of the 2009 Housing Bill states that where householders are experiencing "undue hardship'' in repaying loans "the housing authority may enter into arrangements with the household".

However, Environment Minister John Gormley has not yet implemented this section, Mr Wall said.

"John Gormley's failure has meant that local authorities are not able to deal humanely with those who are in financial difficulties with regard to housing loans they have obtained from local authorities.''

Speaking to the Sunday Independent, Mr Wall said it was astonishing "that the Government are behaving in a worse manner to these home-owners''.

Based on figures from the local authorities' Service Indicators Report 2008, published last June, Mr Wall says local authority mortgage arrears levels are running at 11.7 per cent, a marginal increase on 2007.

However, figures from November and December 2009 give a quite different picture.

They reveal that in some councils, such as Clare, up to 70 per cent of local authority loans were in crisis.

Other problem councils were Carlow (63 per cent), Wexford (54 per cent), Limerick City Council (52 per cent), Limerick County Council (51 per cent), Laois (48.8 per cent) and Dun Laoghaire (42.8 per cent). However, although the figures from 18 of the State's 34 councils revealed that 1,443 houses were in arrears, Mr Gormley has claimed that local authority borrowers have received "considerable protection".

Mr Wall however responded by noting that he and his colleagues "are being inundated by pleas from distressed home-owners at the rate some times of one a day''.

Sunday Independent

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