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We're sleep-walking into repossession crisis - Hall

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The ESRI has said new mortgage rules will hurt the housing market

The ESRI has said new mortgage rules will hurt the housing market

The ESRI has said new mortgage rules will hurt the housing market

A CAMPAIGNER on household debt has claimed the banks are to ramp up repossessions.

David Hall of the Irish Mortgage Holders' Organisation said the country was "sleep-walking" into a repossessions crisis and a change to a one-year bankruptcy term is the only way to force banks to do deals with families.

His comments came as the Cabinet decided to oppose a Fianna Fáil bill aimed at tackling mortgages that have fallen into arrears.

Ministers have decided to refer the issue to a joint Oireachtas committee.

Banks issued close to 9,000 court proceedings to repossess homes in the first nine months of last year, figures compiled from Central Bank sources by University College Cork economist Seamus Coffey show.

The numbers of repossession orders issued had more than quadrupled to 8,882 in the first three quarters of last year compared with the same period in 2013, Mr Coffey worked out.

Mr Hall said there were 59,000 residential mortgage accounts that were more than a year in arrears.

Around 25,000 of these are at serious risk of repossession. Many of these homeowners have not been engaging with the bank because they have no money to pay the arrears and can't manage the monthly repayments, he said.

"A significant number won't engage because if they do they will lose the home. This is a housing problem. It is no longer about debt," Mr Hall said.

He called on the Government to fully implement the Keane Report, which it commissioned soon after it came to power.

He said the recommendation to provide 100 mortgage advisers to State personal finance advisory agency, Mabs, had never been acted on.

And he said the mortgage-to-rent scheme should be extended. This should be broadened out to a system where local authorities and banks share ownership of homes where people cannot pay the mortgage.

The families would pay what rent they can afford, and the local authority would subsidise the rest of the rent, to be paid to the bank.

He also called for the bankruptcy term to be reduced to a year as a way of forcing banks to do more State-approved debt deals.

He backed moves on this by Labour backbencher Willie Penrose.

Irish Independent