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Urgent need for leadership on mortgage arrears crisis

21 May 2012

The continued rise in households behind on their mortgage payments is another red flag for government to speed its reform of our hopelessly inadequate debt laws, said legal rights organisation FLAC (Free Legal Advice Centres) today.

The past weekend's Sunday Business Post reported that figures from the Central Bank for the first quarter of 2012, due to be published this week, would show that households in mortgage arrears of more than 90 days had risen to 10.5% of all residential mortgages arrears. Noting that this was in line with increases in previous quarters, FLAC Director General Noeline Blackwell said it was "almost unbelievable" that the country's legal infrastructure still has not evolved to keep pace, despite repeated promises from the responsible government departments.

"This figure translates to more than 80,000 households which are in deep trouble. It doesn't include the people who are arrears of less than 90 days, or the people who have already done deals with banks and are paying less than their full mortgages, or indeed the people in local authority housing who are in arrears. We know from our FLAC centres and telephone information line that people with mortgage debt are often juggling other personal debts also. They simply have no options left right now, thanks to our inadequate and out-of-date laws.

"This government and its predecessor have been talking about sorting out personal debt for years now. How much longer will we have to tell people that they can do nothing to sort out their debts, that they have to throw themselves on the mercy of their creditors? It's just inhumane and frankly unnecessary," said Ms Blackwell.

In April FLAC held a conference on the draft personal insolvency scheme, which as it currently is written will include mortgage (or 'secured') debt. The conference heard from international and national experts who warned of the pitfalls of legislation which largely requires the good will of creditors to see debtors out of trouble as well as the need to include mortgage debt as part of a holistic personal debt settlement system.

FLAC was keenly awaiting the publication of the long-awaited Personal Insolvency Bill now scheduled for the end of June, said Ms Blackwell.

"This is the 15th straight quarter that we have seen a rise in arrears since we started to track the mortgage situation in 2008. We don't want to sound like a broken record, but the fact remains that mortgage arrears continue to cause extreme stress in homes all over Ireland with huge legal, financial and health repercussions - we just need a clear and transparent strategy now," she concluded.

/Ends

Editors' notes:

  1. FLAC (Free Legal Advice Centres) is an independent human rights organisation dedicated to the realisation of equal access to justice for all. It campaigns through advocacy, strategic litigation and authoritative analysis to contribute to the eradication of social and economic exclusion.
  2. The Central Bank figures are due to be released this week. The number of residential mortgages in arrears of 90 days or more is expected to rise from 70,911 to over 80,000.
  3. In Q4 2011, some 70,911 private residential family home mortgages were in arrears for 3 months or longer. Of these, 53,086 were in arrears for 6 months or more.
  4. FLAC has the following resources available on the issue of mortgage debt:

 

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