ONE OF DUBLIN’S largest mortgage brokers has thrown cold water on the announcement by the top banks that they plan to help homeowners experiencing mortgage difficulties.

Frank Conway of the Irish Mortgage Corporation warned yesterday that this plan is “likely to be dead on arrival” without a holistic approach to consumer debt.

The essence of the problem is that many creditors are “all looking for payment from the same shrinking pot of household income”, he says, noting that salaries have been drastically cut in the last 18 months.

He said the difficulties with household budgets are likely to continue for years to come with several ministers echoing one another in calling for a general reduction to average wages as a means of returning the country to a state of competitiveness.

Conway says that while the motives of the Government may be well intended, they will result in increased financial pressure for many people who are now trapped with massive legacy debts.

The Government already seems set on introducing a property tax at some point in the future – representing another burden on household income.

Households are already being battered with big increases to insurance cover, including health and home.

Homeowners now have to choose between paying a car insurance premium or renewing their life or health protection cover.

Conway called for a “New Deal” for consumers to recognise the massive gap between levels of household indebtedness and income. “Many people simply no longer have the means to service debts they have carried over from an era of optimism, growth and seemingly endless wage inflation. Debt forgiveness and educational support must be rolled out nationally if those in the greatest level of difficulty are to survive this current financial Armageddon.”

Hear Hear!