Saturday 20 January 2018

Accountant mortgage scheme branded a 'failure'

Some 110,000 homeowners had their mortgage accounts restructured by the end of last September
Some 110,000 homeowners had their mortgage accounts restructured by the end of last September
Charlie Weston

Charlie Weston

A scheme to give people in trouble paying their mortgages a short consultation with an accountant has been dismissed as a flop after it emerged that tiny numbers availed of it.

More than two years after it was launched, just 1,200 people have used a scheme which allows those offered a long-term deal by their banks to have it explained by an accountant.

A spokeswomen for the Department of Social Protection, which was behind the setting up of the scheme, said there are 2,000 accountants participating in it.

"The independent advice service costs €250 per engagement and is paid by the lender. To end of the third quarter of 2014, some 1,207 mortgage holders have availed of this service," the department said.

The most recent Central Bank figures show that there are just short of 85,000 residential mortgage holders more than three months in arrears.

Some 110,000 homeowners had their mortgage accounts restructured by the end of last September.

David Hall of the Irish Mortgage Holders Organisation said the poor take-up of the accountancy consultations showed the scheme was a failure.

Restricted

"This is another flop along with the mortgage-to-rent scheme, the lowering of the bankruptcy term to three years, the setting of mortgage arrears targets by the Central Bank, and the low number of debt deals done through the Insolvency Service," he said.

Accountants involved in the service are not allowed to negotiate on behalf of the mortgage holder, and are restricted in the advice they can give, with the consultation largely about explaining the implications of the deal offered by the bank.

Mr Hall said: "The Department of Social Protection won't allow the Irish Mortgage Holders Organisation to advise and be paid, which is a disgrace."

Director of the Free Legal Advice Centres (FLAC) Noeline Blackwell said the accountant is paid to explain any bank debt resolution proposal, but only when negotiations were already done and the offer made.

"This is entirely unacceptable in a climate where lenders have the ultimate, and unchallenged, say on whether they will or won't offer a debt restructure to a borrower, or indeed why they are offering a solution which the borrower cannot understand or in which he or she cannot see any value."

Meanwhile, MABS (the Money Advice and Budgeting Service) said that it has helped 300,000 in financial difficulties since 2009.

Irish Independent

Promoted Links

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Also in Business