Government may row back on special mortgage court

The Government looks set to row back from a promise to establish a stand-alone mortgage court to help property owners with serious arrears problems to stay in their homes.

Briefing papers from the Department of Justice indicate the Coalition has started to explore alternative solutions as a means of getting around the commitment, which was included in the programme for government.

In April, a special committee chaired by then taoiseach Enda Kenny considered a proposal to have the Circuit Court hold special sittings on certain days to find solutions for householders in mortgage arrears.

Fine Gael and the Independent Alliance, when forming a minority Government last year, said they would “establish a dedicated new court to sensitively and expeditiously handle mortgage arrears and other personal insolvency cases”. However, no steps have yet been taken to do so amid suggestions that it would be costly and complex.

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Alternative

The briefing notes prepared for Minister for Justice Charlie Flanagan on taking the role last month show that the Government has looked at using the existing courts as an alternative.

The briefing says the mortgage court, as promised, would be a dedicated court, would impose solutions to a person’s mortgage difficulties and could sit in private if requested by the debtor.

Another programme promise – which undertook to consolidate into one national service all the supports available for those in arrears – has been fulfilled.

The Abhaile service was launched in October and, according to the briefing, appears to have reduced the volume of arrears cases coming before the courts.

“It provides for in-house dedicated mortgage arrears advisers in Money Advice and Budget Service offices across the country specifically to assist and negotiate with financial institutions on the borrowers behalf including access to free independent financial and legal advice.”

The briefing also points to a growth in new applications for personal insolvency solutions, with the numbers almost doubling from 570 in the first quarter of 2016 to 1,302 in the first quarter of this year.