Government sits on the fence as mortgage debt crisis deepens – Ó Domhnaill

Local Fianna Fáil Senator Brian Ó Domhnaill has said that the Government is adding to the distress of struggling homeowners by failing to give any clear signal about how they intend to tackle the crisis of mortgage debt in this country.

The Donegal Senator said: “The Minister for Finance Michael Noonan has denied suggestions that the crisis for mortgage holders is ‘snowballing’, despite the fact that the number of people in mortgage difficulty has gone from one-in-ten to one-in-eight.

“During media interviews this week, Minister Noonan refused on several occasions say whether or not the Government believes that banks should be writing off mortgage debt for homeowners in extreme difficulty.  He continued to sit on the fence, even after he clearly stated that banks that were bailed out by the State have the money to cover debt write-offs.

“Figures from the Central Bank this week show that a further 70,000 mortgages were restructured in the three months to the end of June.  However the Minister has been utterly vague about whether the Government believes that debt should be written off as part of that process. There is total confusion at the heart of Government on this issue.  Their failure to communicate a clear approach is fuelling the confusion and uncertainty for families with large mortgage debt.”

“The Government is waiting for the deliberations of an interdepartmental group before deciding what to do.  What they should be doing is engaging with the Free Legal Advice Centre and groups like New Beginning that are at the cold-face in dealing with people with mortgage debt.

“Fianna Fáil has published radical plans on tackling mortgage arrears and proposed legislation which would allow people in serious difficulty with their mortgages to avoid repossession and stay in their family homes. We have called for a deferred interest scheme, reform of the mortgage interest supplement, the introduction of a debt settlement system outside of the courts, and an overhaul of Ireland’s bankruptcy laws.

“The Fianna Fáil plan was published in July, and included two Bills and several other measures to help homeowners in Donegal and across the country who are struggling with their mortgages. But the Government voted down our plan to protect the Family Home, despite that other parties, independents and interest groups gave it their backing. 

“The longer the Government dithers on this issue, the more stress is put on mortgage holders who feel they are stuck in hopeless financial situations. It’s time to stop sitting on the fence and take real action to offer these people some support.”

Posted: Sep 1, 2011     |     Categories: Uncategorized