Parties welcome code to stop banks repossessing homes
Published 14/08/2010 | 05:00
THE new code to protect struggling mortgage holders from having to "hand over the keys" to the banks was welcomed by all parties last night.
There was broad support for the extension of the 12-month repossession protection from Fianna Fail, Fine Gael, the Labour Party, Sinn Fein and the Green Party.
But there is concern among the parties that further measures will be required to help people to hold on to their homes -- including the introduction of limits on how much banks can "squeeze" out of them in repayments.
Fine Gael housing spokesman Terence Flanagan said his party wanted people in arrears to be allowed to write off some of their mortgage debts -- as recommended by the International Monetary Fund.
"Banks need to consider on a case-by-case basis a debt forgiveness programme for householders who can no longer repay their mortgage," he said.
But the Financial Regulator Matthew Elderfield recently warned against such a scheme, saying it could add to the arrears problem by encouraging solvent borrowers not to repay in the hope of benefiting from a bailout.
Mr Flanagan said he believed there were far more than 32,000 people in mortgage arrears when those who had been allowed to repay only interest or given longer repayment schedules were included.
He called for the updated figures to be published on a monthly basis. "The figures on arrears are being kept artificially low," he said.
Green Party Senator Mark Dearey said he had been told of people in severe difficulties in commuter-belt towns such as Bettystown and Laytown in Co Meath.
The percentage of those in mortgage arrears could be as high as one in five compared with one in 20 nationally, he said.
Sinn Fein finance spokesman Arthur Morgan said that despite the new code, there was an inherent danger some homeowners will fall between the cracks and risk losing their family home.
The Government is considering further proposals from Communications Minister Eamon Ryan to tackle the mortgage arrears problem.
These include allowing householders to defer making interest repayments on their mortgages or getting banks to take an equity stake in houses.