Kenny criticises approach by banks to the mortgage crisis

Taoiseach says family home ownership is of ‘fundamental and immense importance’

Fianna Fáil leader Micheál Martin said: “The Central Bank is warning of a €9.3 billion mortgage debt mountain.”

Fianna Fáil leader Micheál Martin said: “The Central Bank is warning of a €9.3 billion mortgage debt mountain.”

Thu, Oct 3, 2013, 01:00

Taoiseach Enda Kenny has criticised the performance of the banks in dealing with the mortgage crisis. He said it was not good enough that they had failed to step up to the mark in dealing with the issue.

“They themselves have their problems in that their people had become used to throwing out money all over the place without being able to deal with the crisis and the consequences of that,” he said.’

Mr Kenny said the Government had engaged with the banks and all the Central Bank governor Patrick Honohan had to do was look for extra powers if he required them.

“The point is that the Central Bank, as the regulator, has now to audit the figures that have been submitted by the banks.’’

Mr Kenny said 80,000 mortgages had been restructured and he assumed they had not just been the subjects of letters indicating legal action. He had to assume that those were sustainable solutions, both for the borrower and the lender.

He added there was a range of options open to people in mortgage distress. It was not true to say the first port of call was repossession.

“The family home in this country is of fundamental and immense importance to people and their families,” he said.

Fianna Fáil leader Micheál Martin said more than 97,400 mortgages were in arrears for more than 90 days. “The Central Bank is warning of a €9.3 billion mortgage debt mountain,” he said.’

Mr Honohan, Mr Martin said, had confirmed that at the end of June 74,000 of those mortgage-holders in arrears were not yet in arrangements with their lenders. “Effectively 75 per cent of distressed mortgages are not being dealt with. That is an extraordinary revelation by the Central Bank governor and is causing deep concern across the country,” Mr Martin said.’

Meanwhile, a Private Members’ Bill dealing with mortgage distress, moved by People Before Profit TD Joan Collins, was rejected by the Government.

The Mortgage Restructuring Arrangement Bill 2013 would have operated in conjunction with the Personal Insolvency Act. It would have specified that a mortgage restructuring arrangement would not require debtors to make payments leaving them with insufficient income to maintain a reasonable standard of living.

Minister for Justice Alan Shatter said the Bill would turn a negotiated debt-resolution approach to mortgage arrears into an adjudicative process. Such a development would dramatically change the basic philosophy and working of the insolvency legislation and completely undermine the rights of creditors.