Mortgage arrears law hoped for by summer
THE GOVERNMENT is hoping legislation to help householders in difficulties with their mortgages can be passed into law before the summer, according to Minister of State for Finance Brian Hayes.
An independent advice scheme for people in difficulty with their banks would be put in place in coming weeks as part of the process of dealing with the problem, he said.
There was frustration in the Government that the banks had not moved faster to deal with the issue, he said, pledging action on the matter would be taken as quickly as possible.
He said the long-awaited Personal Insolvency Bill, which is hoped to be published next month, would cover the issue of mortgage arrears.
“The banks are waiting for this legislation before they take decisive action on the whole issue. It will be a game-changer,” said Mr Hayes.
He accepted it had taken longer than anticipated for the Government to bring forward the Insolvency Bill, but said it was a complex piece of legislation involving a number of departments.
“A Cabinet subcommittee on the issue was established in March and the Taoiseach has been centrally involved in the subcommittee deliberations. The ambition now is to get the legislation into force by the summer recess,” said Mr Hayes.
The Minister noted the Law Reform Commission had recommended changes to the insolvency regime two years ago and the heads of the Bill had been prepared.
However, the complexity of the legal changes and the involvement of a number of government departments meant it had taken longer than expected to get the full Bill ready.
Mr Hayes said there would not be any blanket debt write-off once the legislation was in force.
“It will have to operate on a case-by-case basis, as that is the only way to deal with the problem,” he said.
The mortgage issue would be part of the new insolvency regime, he continued, and this would involve changes in the way banks dealt with people who had problems paying what they owed.
“The establishment of an independent mortgage advice system is an essential part of the process. At present, people who are having problems with their banks can only have their problems referred to an adviser within the bank,” the Minister said.
“What we need to put in place is an independent mortgage advice system where individuals can go to a third party with their problems.
“That system will be launched in the next few weeks before the legislation is published,” Mr Hayes added.