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Brokers fear 20,000 home repossession cases in year

Ireland is facing an avalanche of between 15,000 and 20,000 home-repossession cases in the next 12 months, according to the Irish Brokers' Association( IBA).

The agency, which represents more than 700 insurance intermediary offices authorised by the Financial Regulator, said the courts would be overwhelmed with cases unless the next Government tackled the issue with absolute urgency.

The warning comes as Ulster Bank looks set to increase its interest rates for mortgage holders.

Just last Thursday, Permanent TSB announced a one per cent increase in mortgage rates for standard variable rate customers.

Ulster Bank is set to confirm an increase in its mortgage standard variable rate by 0.5 per cent, from 3.85 per cent to 4.35 per cent, from March 1. On a mortgage of €300,000, the move will add more than €90 to the monthly repayments.

AIB, Bank of Ireland/ICS, EBS and Irish Nationwide are all expected to raise their variable rates to stem massive losses on home loans.

The IBA's warning of a tsunami of repossessions in the next year follows an analysis of the latest figures.

The industry body contends that a minimum of 13,000 mortgage customers who have defaulted are already past the 12-month protection period and so are now completely subject to the will of the banks.

Last September, an additional 15,000 homeowners were more than six months in arrears and the IBA believes that at least half of these will still be unable to meet their repayments in March of this year, bringing the total to more than 20,000 who are facing repossession.

Ciaran Phelan, CEO of the IBA, said: "Government intervention has done little to solve the issue for consumers, Tinkering around the edges is simply delaying the inevitable flood of repossessions.

"The longer we defer finding a solution, the greater the cost, both financial and emotional."

Meanwhile, the issue of helping those in negative equity continued to dominate the election campaign yesterday, after Fine Gael pledged to give extra tax relief to those who had bought at the height of the property boom.

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The proposal is to increase mortgage-interest relief to 30 per cent -- up from 20-25 per cent -- for those who bought houses for the first time between 2004 and 2008.

According to calculations by Frank Conway of the Irish Mortgage Corporation, the number of first-time buyers during this period could be up to 250,000.

However, Fianna Fail dismissed it as an "uncosted gimmick" and yesterday Labour Party leader Eamon Gilmore said there were a number of issues that arose from the latest proposal.

Not everybody who is in trouble with repaying their mortgage bought their home between 2004 and 2008, Mr Gilmore said.

Replying to the suggestion that mortgage interest relief for first-time buyers should be abolished in order to help pay for the new Fine Gael proposal, Mr Gilmore said he was of the opinion that it was probably unfair to ask somebody's younger sister to pay for the mortgage problems of their older brother.

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