ONE OF the country’s biggest building societies says it may provide job-finding assistance to customers with big mortgage arrears.
The service, which could include help with writing a CV, training and advice, is one of a number of measures being considered by EBS to deal with the rising number of customers in financial difficulty. The company is also proposing “pre-emptive analysis and contact” with households at risk of not being able to meet their loan repayments.
Outlining the proposed measures to the Oireachtas joint committee on Social and Family Affairs, EBS chief executive Fergus Murphy said the banking industry and the Government needed to act fast in response to the growing debt crisis. With unemployment rising and mortgage interest rates likely to increase, many more people would get into financial difficulty, and fears of losing the family home were widespread.
Immediate action could provide a breathing space for homeowners by removing the fear of repossession, but longer-term measures were also needed to provide payment protection and to remove the risk posed by negative equity.
Mr Murphy said house repossessions were the absolute last resort for the industry, as the figures showed; for every repossession in Ireland, he said, there were 35 in the UK relative to the size of the population. But he said any agreement to extend the moratorium on repossessions for a further one or two years, while the right thing to do, could have unintended consequences for the Irish banking system. Such an agreement would require government and industry support to maintain the quality of loans used as collateral for liquidity by the banking system.
Mr Murphy also called for a review of the practice by some banks, but not EBS, of charging penalty interest on arrears. The registration of all title for properties should be brought up to date and the granting of orders to banks for abandoned properties should be expedited so that they can be refurbished for sale or rent.
Money had become too cheap and banks everywhere had lent it too cheaply, he said. Some banks had customers with mortgages at rates that were uneconomic, but these had been given as part of the drive to increase market share.
“The culture in Ireland was that buying property makes you money. It got into our DNA. In future, we need to look at property as a utility,” he said.