Friday 24 January 2020

Banking body wants to help those at risk of losing homes

Charlie Weston Personal Finance Editor

THE Irish Banking Federation (IBF) is exploring additional ways that its members can offer help to mortgage holders who are in arrears.

Former KBC Homeloans boss Tom Foley has been appointed to sound out lenders on new supports they are prepared to offer those at risk of losing their homes.

A spokesman for the IBF said: "We have commissioned Tom Foley to explore various possible options with all lenders to identify additional solutions across the sector."

Members of the IBF, which does not include subprime lenders who are responsible for the lion's share of repossession cases before the courts, are showing forbearance to those in arrears.

This involves allowing distressed borrowers to take payment holidays, rolling up interest, allowing mortgage holders to go interest-only, or extending the term of the loan.

The IBF has told the Irish Independent that more than 30,000 homeowners have had their mortgages restructured in this way.

But lenders have not moved to the next step of debt forgiveness, where some of the home loan is written off for those unable to meet the repayments.


It is understood that no consensus has emerged from lenders on whether debt forgiveness is appropriate.

The Financial Regulator's move to ban all lenders from moving to repossess homes of those who engage with their lenders for a year has removed some of the urgency from the IBF's approach to the problem, it is understood.

The IBF will be part of Energy Minister Eamon Ryan's initiative to set up an expert panel to explore moves such as banks taking a stake in the homes of those unable to meet their repayments.

Recommendations on debt forgiveness are expected to emerge from that process.

Additionally, the economist and former government minister Martin O'Donoghue has been asked by the IBF to review its pledge not to initiate any form of legal action against mortgage holders in arrears who engage with their lender.

Figures from the regulator before Christmas showed that 26,000 people have not paid their mortgage for more than three months.

An Oireachtas report this week estimated that the arrears figure has climbed to 35,000, while this newspaper has estimated that it is 40,000.

But figures out this week from ratings agency Moody's imply that the number in arrears for three months or more has stabilised at 25,650.

Irish Independent

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