Tuesday 23 January 2018

Fine Gael party discusses long term arrears as Labour urges bankruptcy changes

Joe Costello
Joe Costello

Daniel McConnell, Niall O'Connor and John Downing

Fine Gael and Labour Party TDs have increased the pressure on government ministers to deliver a remedy for families in deep mortgage distress.

The issue of mortgages dominated both weekly meetings of the Government parties today as concern grows over the spiralling arrears crisis.

At the Fine Gael meeting, Cork North West TD Aine Collins proposed that councils would buy distressed homes at 20pc below market value.

The local authorities could then rent these properties back to the occupant in a move that see them remain in their homes.

There is about 35,000 distressed mortgages that have not been paid for more than two years.

Ms Collins argued that this 20pc price reduction would see the banks represent their "social commitment" following their bailout by the taxpayer

Aine Collins
Aine Collins

In response, Fine Gael TDs and senators were told a "menu of options" is being prepared by senior Government figures aimed at resolving the mortgage crisis.

The plan will be unveiled by the end of April.

Read more: Government has failed families on variable interest rate mortgages - Micheal Martin

Among the items on this so-called menu is the issue of bankruptcy - which dominated the agenda at the Labour Parliamentary Party meeting.

Party TDs are adamant that a proposal by backbencher Willie Penrose - which would see the maximum term reduced from three years to one - must be introduced by the Government.

TDs including Mr Penrose and parliamentary party chairman Jack Wall have suggested that this move represents a red-line issue for the Government.

"Going with a half way measure of two years would not be acceptable," Mr Penrose said.

Senior Government sources have said Mr Penrose's proposal remains firmly on the table and is being closely examined as part of a package of measures that will be introduced within weeks.

Meanwhile, Labour backbencher Joe Costello called on ministers to introduce proposals which would see local authorities provide grants to first time buyers in order to assist them in getting onto the property ladder.

The move would be aimed at assisting those who are struggling to meet the 20pc deposit rule laid down by the Central Bank.

Environment Minister Alan Kelly is said to have responded positively to the proposal, however, sources say the measures would not be introduced in the short term.

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