Friday 26 December 2014

Mortgage holders tied down by red tape

Editorial

Published 25/04/2014 | 02:30

The ‘mortgage to rent' scheme, which has been proposed for 2,337 families, has led to just 38 transactions being sanctioned so far.
The ‘mortgage to rent' scheme, which has been proposed for 2,337 families, has led to just 38 transactions being sanctioned so far.

It would appear that most attempts to broker deals between distressed mortgage holders and their lenders are coming to naught. The latest setback to such settlements is the revelation that the 'mortgage to rent' scheme, which has been proposed for 2,337 families, has led to just 38 transactions being sanctioned so far.

This scheme, in which distressed borrowers who could not pay mortgages would rent their own homes, is floundering even though it should be attractive to all those involved. It would mean borrowers paying something and the lenders getting something in return. Happiest of all would be the Government, which would not be left with the responsibility of rehousing thousands of families who will otherwise lose their homes.

But so far Ireland's two biggest banks, Bank of Ireland and AIB, have only completed once such transaction each.

The scheme, although well intentioned, appears to be too bureaucratic and involves too many agencies. Another sticking point in sanctioning such deals appears to be the question of who will pay the balance still owed on the original mortgage when the scheme is completed. Banks and other lenders, it appears, believe they will be the big losers.

In tandem, banks have issued 30,000 borrowers, who are not meeting their mortgage repayments or engaging with their lender, with letters threatening repossession. It would appear this is the cheapest solution for banks in most cases. They may also be banking on a rising property market, particularly in Dublin and other urban areas, where they now have a chance of realising a good price.

Sorting out the mortgage situation was never going to be easy. There is no 'one size fits all' and the banks and the Government are aware of the perils of trying to sort out those who can't pay from those who won't pay. But the bottom line is that both sides are going to have to take some pain if this situation is to be resolved. Those who can no longer afford to live in the homes they bought in the boom are going to have to give them up. But some form of debt write-off is also going to have to be negotiated for many, even though this bill will inevitably land back with the taxpayer in the form of further recapitalisation of the banks.

One thing is certain, the longer it drags on the more difficult and painful it is going to be.

VETTING TAXI DRIVERS A MATTER OF PUBLIC SAFETY

For the casual user, taxi deregulation has been one of the great successes of the recent past, giving cities and towns a plentiful supply of taxis, even at the busiest times. Obviously, it led to a lot of moaning among the original taxi-driving fraternity, but at last we got a service where the user rather than the providers took priority. Advanced technology has also improved the service and users are often informed in advance with a name and picture of the driver and time of arrival. All this helps to reassure customers, especially parents who are using such services to ferry teenagers and young people to and from social events.

All very well and good. But a report some years ago that 6,000 taxi drivers had criminal convictions has put another complexion on deregulation. Now the National Transport Authority has written to taxi drivers with criminal convictions telling them that they must present themselves to a garda station by May 6. Legislation, spearheaded by junior minister Alan Kelly, is aimed at removing those with convictions for murder, sexual offences and gun offences from the industry.

Drivers' unions have expressed disquiet about the letters, which were sent to taxi drivers in recent days. They are also seeking legal advice about whether these letters apply to those with 'historic' convictions. It is important for the security of the general public that gardai are aware of the criminal records of those driving public service vehicles and that people with serious criminal convictions should be disqualified from doing so in the interests of public safety.

Irish Independent

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