New bailout plan to protect families from losing homes
Published 01/02/2010 | 05:00
FAMILIES in danger of losing their homes may be given longer to pay off their mortgage, under a proposal to help struggling debt-holders.
The Government is drawing up its plan to protect homeowners facing repossession -- four months after promising it.
The opposition said the proposal was too late for homeowners currently fighting to keep their homes.
Among the measures to protect families having difficulties with their home mortgage payments the coalition will look at are:
- Reduced rates.
- Longer maturity dates.
- Rolling-up of outstanding interest.
- The bank taking equity in the house.
- The bank taking ownership and leasing back the property to the resident with rent payments coming off the loan.
The Government is finally going to appoint an expert group on mortgage relief and debt reform.
The group will also include the Irish Banking Federation, the Money Advice and Budgeting Service (MABS), the departments of Finance, Justice and Social and Family Affairs, as well as a range of legal and accounting experts.
The group will be given a short time-frame to come up with recommendations for action.
The setting up of the group comes on foot of a promise in the new Programme for Government agreed between the Green Party and Fianna Fail.
Communications Minister Eamon Ryan said the Government had to take radical measures to rescue the banking system as it got into severe difficulties in recent years.
"Many people are now facing similar difficulties in managing their debts as they struggle to hold onto their homes and return their businesses to their full potential," he said.
"Just as the banks were assisted to protect the greater good we need to also help those struggling with indebtedness so they can be part of the recovery rather than be caught up in Dickensian court proceedings.
"We need innovative solutions to cope with this legacy of indebtedness," he added.
Mr Ryan said the Government was bringing in the best experts in debt management to bring forward proposals for the new regulations and banking initiatives needed.
The group will examine all aspects of debt management, bankruptcy and insolvency law and enforcement.
Looking at international comparisons, the group will recommend further mortgage assistance measures to allow people to hold on to their homes, Mr Ryan said.
"All debt advisers say that the best thing both debtor and creditor can do in times of difficulty is to sit down together and work through the loans to come to a mutually beneficial arrangement for the long-term," he said.
"The whole idea is that we don't want people encumbered by our recent debt explosion and for that to stifle our recovery."