Monday 23 January 2017

More than 100 homeowners a week get free legal aid and financial advice over arrears

Published 17/11/2016 | 02:30

Mortgage-holders struggling to repay debts or facing the possibility of repossession have been able to avail of vouchers to get free legal and financial advice under the Government’s Abhaile scheme. Stock photo: Graham Moore
Mortgage-holders struggling to repay debts or facing the possibility of repossession have been able to avail of vouchers to get free legal and financial advice under the Government’s Abhaile scheme. Stock photo: Graham Moore

More than 100 mortgage-holders at risk of losing their homes are being given aid by the State to get legal and financial advice every week, new figures reveal.

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The frequency of the payments, set to cost up to €15m over the next three years, underlines the extent of the ongoing mortgage arrears crisis.

Mortgage-holders struggling to repay debts or facing the possibility of repossession have been able to avail of vouchers to get free legal and financial advice under the Government's Abhaile scheme, launched last July.

Junior Justice Minister David Stanton told the Dáil more than 2,400 vouchers had been issued since then in respect of 1,718 principal private residences.

Most of the vouchers have been for financial advice, which is made available through the Money Advice and Budgeting Service (Mabs).

The remainder were issued for legal advice, available from a panel of solicitors under the supervision of the Legal Aid Board.

The board's chief executive John McDaid said it was hoped the scheme would drastically improve the level of representation struggling mortgage holders enjoy in the courts and also help identify other possible solutions that may not have been thought of.

"My understanding is that the level of court representation for mortgage debtors was somewhere between 10pc and 20pc. That is a huge number of people who are unrepresented," he said.

As well as providing a legal advice service for insolvent persons who may face repossession of their home, the Abhaile scheme also offers a duty solicitor service in which a solicitor will be present to assist borrowers at repossession court lists.

It also includes a legal aid service for court reviews of personal insolvency arrangements that have been rejected by creditors.

The Legal Aid Board's recently appointed chairman, solicitor Philip O'Leary, said 283 vouchers for legal advice had been issued.

Legal aid was granted for 62 appeals to the Circuit Court in relation to the refusal by lenders to accept personal insolvency arrangements.

It was also granted in four cases where Circuit Court findings are being appealed to the High Court.

He said the figures showed "quite a demand" for financial and legal assistance.

"The big problem out there has been a lack of engagement, primarily by distressed borrowers, with the system," he told the Irish Independent.

"What the scheme offers is professional advice, both legal and financial, to distressed borrowers. That is good from everybody's point of view as it gives them an opportunity to engage.

"To be fair to the financial institutions, they want to engage with the borrowers and come to some sort of resolution too if possible."

The number of mortgages in arrears has been declining, but remains substantial.

The most recent Central Bank figures showed over 82,000 mortgages for principal private dwellings, around 11pc of all mortgages, were in arrears in the second quarter of the year.

Around 35,000 of these had been in arrears for 720 days or more.

Irish Independent

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