Legal-aid helpline inundated as 30,000 now in mortgage arrears
A LEADING legal rights group has criticised the Government's response to the mortgage crisis hitting thousands of homeowners.
The Free Legal Aid Centres (FLAC) group said that it had received a deluge of calls to its helplines in the past few weeks following the publicity surrounding the issue of mortgage arrears.
FLAC director general Noeline Blackwell said the FLAC centres had received three times the normal number of calls from homeowners who feared they would lose their homes.
Up to 30,000 people may be in arrears on their mortgages, while as many as 350,000 people could end up in negative equity by the end of next year if house prices fall by 50pc.
Calculations by this newspaper show that on average mortgaged households are sitting on €43,000 of negative equity.
"We have had a deluge of calls to FLAC's information line, particularly from people in arrears with their mortgages and desperate for help," Ms Blackwell said.
She said many of the callers were begging for information on ways they could pay their debts at a time when household budgets were squeezed hard. The Greens have secured agreement in the new Programme for Government that a number of options to aid those at risk of losing their homes will be considered.
One option being considered is making banks and building societies buy homes from people struggling to meet their mortgage payments and rent them back to them.
Other schemes being looked at include measures to reduce the interest on mortgages, banks being forced to take equity in the home, and longer mortgage terms. But FLAC said the Government needed to act faster to help out those in danger of losing their homes.
In an open letter to TDs and senators, FLAC urged public representatives to press for action that offered immediate relief for people in debt.
"The range of options needs to include money and legal advice, capacity to remodel and revise existing loans to take account of changed circumstances and reckless lending, moratoriums where appropriate," Ms Blackwell said.
"All of these changes need to be properly regulated, and the courts must be able to impose terms if the parties can't agree. "When the negotiations with the banks cease at the end of the NAMA legislation, the chance to develop these remedies may be entirely lost."
The FLAC director was also critical of the protocol on consumer debt negotiated between the Irish Banking Federation and the State-supported Money Advice and Budgeting Service (MABS) and the Financial Regulator's code of conduct on mortgage arrears.
"Closer examination of these documents confirms that neither provides a full solution. MABS itself is oversubscribed and underfunded," Ms Blackwell added.