Tuesday 6 December 2016

Nothing to see here, as callous ministers look the other way

Published 21/05/2015 | 02:30

'Ministerial rhetoric about “85pc of mortgages not being in arrears” is akin to telling tens of thousands of people on hospital waiting lists and trolleys that more than four million of the population are in good health – it’s irrelevant to addressing resolutions'
'Ministerial rhetoric about “85pc of mortgages not being in arrears” is akin to telling tens of thousands of people on hospital waiting lists and trolleys that more than four million of the population are in good health – it’s irrelevant to addressing resolutions'

The marriage referendum debate obscures confirmation of this Government's greatest failure. Last week's personal indebtedness non-announcements will haunt Fine Gael and Labour in the 2016 election. The expectations of tens of thousands in debt distress were low; the belated package announced failed to even match Government leaks. Protection of powerful vested interests (bankers and lawyers) takes precedence over struggling families. I trawled the weekend newspapers for analysis of Government's announcements, to find none - there was nothing to analyse. It's the disgrace of this administration; its inability to understand how household debt will hold back the economy and the future dire consequences of mass evictions.

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The sum total of Michael Noonan, Frances Fitzgerald and Alan Kelly's collective package was minor window dressing. Allowing a legal right of appeal to a circuit court judge where banks vetoed a Personal Insolvency Arrangement (PIA) is a welcome development. It had relevance for a mere 111 cases where 65pc of creditors had agreed a scheme prepared by a PIP. These debts earn/work-out terms apply over a six-year period, involving very confined living standards, while income is extracted to repay debts. At the end of which the debtor is released, involving write-downs of outstanding balances. PIAs don't usually involve mortgages; rather a complex range of different debts with secured, unsecured and trade creditors. This will have little relevance to hard-core mortgage arrears cases.

Most focus has been on the 37,778, owner-occupier mortgages with more than two years arrears. This ignores what's coming down the track, namely a further 19,317 cases with more than one year in arrears. These conveyor belts work through forbearance processes applying under statutory arrears Code of Conduct, overseen by the Central Bank. Despite established breaches, not one sanction/fine has ensued. Fast forward to repossessions: between 482 court orders and 608 voluntary surrenders occurred up to the end of 2014; 8,000 civil bills for repossession are before courts. Cabinet has just passed up their last opportunity to prevent this debt crisis becoming a homelessness tsunami. Physical evictions of parents and children will inevitably become commonplace in the months ahead.

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