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Kenny's taskforce in battle to stop home loans disaster

THE Government will try to stave off a full-blown mortgage "armageddon" with new measures to help struggling families.

A group of senior Cabinet members is to fast-track a series of proposals to help homeowners in arrears.

The sub-committee of top-level ministers chaired by Taoiseach Enda Kenny and Tanaiste Eamon Gilmore held its first meeting on Wednesday.

In comments published today, Mr Gilmore described the mortgage debt problem as an "armageddon" for many Irish families. Finance Minister Michael Noonan, Public Expenditure Minister Brendan Howlin and Environment Minister Phil Hogan were also among those present at the committee meeting.

Margaret McCormick of the Irish Property Owner's Association said today a lot of families are in trouble with buy-to-let loans they had taken out during the boom.

"They may be getting along at the moment but they know they have problems coming down the line," Ms McCormick said.


A move by the Government to withdraw mortgage interest relief on investment homes has caused difficulties, she added.

"They are paying tax on an income that does not actually exist," Ms McCormick insisted.

She also referred to Central Bank Governor Patrick Honohan's comments about the need for banks to repossess buy-to-let properties rather than principle residences.

"If properties were taken off landlords at this stage ... they would be sold in fire sales," Ms McCormick said.

She added that banks will not write off the loans following repossession but sell the homes and leave the former owners with the "debts to try and pay".

The Government's major policy solutions are the Personal Insolvency Bill and implementing the major recommendations of the Keane report into mortgage arrears.

It has told the EU/IMF troika the full Bill will be published by the end of April and it is hoped it will be enacted before the Dail breaks for the summer.

At the sub-committee, Mr Kenny and Mr Gilmore addressed the group, saying they wanted quick and co-ordinated solutions.

Another meeting is to be held before the end of March.