Gilmore critical of banks sending alarming letters on mortgage debt

Tánaiste Eamon Gilmore condemned threatening letters sent by banks to those with long-term mortgage arrears.

“The solution for anybody who is in mortgage distress is not to get a threatening letter . . . of course, not,” he said. “The solution is engagement between the bank and the borrower.”

Mr Gilmore was replying to Billy Kelleher (FF) who said close on 32,000 homeowners were now 720 days or more in arrears. "When you talk about commitments to reduce taxes for the coping classes in the years ahead, we are talking about a cohort of people who are now under huge stress and pressure, Tánaiste. And there does not seem to be anything being done for them."

Mr Kelleher said long-term mortgage arrears represented a massive problem that had to be addressed. The banks, he said, were now including threatening letters as a solution to mortgage arrears of 720 days and over.

Serious problem
Mr Gilmore said he acknowledged there was a problem relating to people who had mortgage arrears for a long time. "Obviously, it follows that the longer it takes to resolve those arrears, the more they are going into arrears,

” he added.

He said sustainable solutions would have to be found for those people on a case-by-case basis. There continued to be a serious problem of mortgage arrears in the country, and the Government’s plan to tackle it was based on the important premise of keeping a roof over people’s heads.

Mr Kelleher repeated Fianna Fáil’s call for an independent oversight of the process to identify what was a sustainable solution.

Coalition strategy
Mr Gilmore said statistics showed a decline in the overall stock of principal dwelling houses with mortgages in arrears relative to the figures for the end of June. It was the first

reduction in the outstanding balance since September 2009. “It shows that the Government strategy in tackling mortgage arrears is working and the banks are engaging proactively with their customers to find solutions.”

The Tánaiste said early arrears had declined significantly, with a quarter-on-quarter fall of 6 per cent. “This appears to demonstrate some success by the lenders in addressing the accounts in early arrears and putting in place appropriate measures to prevent borrowers from going further into arrears.”

He said the number of principal dwelling house mortgage accounts, which were restructured at the end of September, now stood at 80,555, an increase of 1.5 per cent when compared with the previous quarter. Consumers and lenders were agreeing permanent restructures for those in arrears or those who thought they would fall into arrears.

The Central Bank, said Mr Gilmore, was monitoring the banks' work regularly.