'Avalanche of repossessions' on way
THE number of home repossessions will rise this year, the Head of the Irish Banking Federation (IBF) admitted yesterday.
"The trend is upwards," Pat O'Farrell told an Oireachtas Joint Committee on Social and Family Affairs.
Mr O'Farrell revealed that 40 homes were repossessed in the first three months of this year.
This compares to a total of 90 for all of 2008. If this trend continues, the figure for this year will be significantly higher.
Six-out-of-ten borrowers said that they were finding it difficult to repay loans, according to a recent survey by Amarach Research, while 4pc are finding them "a real problem".
Mr O'Farrell described the current repossession system as "archaic" and "a last resort" for banks.
"Banks are cooperating with the new protocol and repossession levels here are 35 times lower than in the UK," he said.
Recently, the banks have agreed to work with the Money Advice and Budgeting Service (MABS) to work out a "mutually acceptable, affordable and sustainable" repayment plan with indebted customers. Mr O'Farrell said that defaulters could be broadly categorised into "those who can't pay" and "those who won't pay".
"Some defaulters will wait until the final stage of repossession before paying," he said.
The committee also heard from financial adviser Liam Croke who expects an "avalanche" of repossession cases in the coming months.