Coalition to push banks on solutions to mortgage debt

Taoiseach Enda Kenny has said the Government will be “far more active” in requiring banks to arrive at a solution with those in mortgage difficulties.

The aim would be to keep a roof over the heads of the people in the vast majority of cases, he said, adding that there was a need for a “direct conversation and dialogue” between the borrower and the lender.

“Clearly, further up the road, there is the insolvency agency, which offers a different route and which is an incentive for banks to make these decisions in the near and medium term,” he added. “I hope they do that.”

He said it was not good enough just to put mortgages on interest-only payments interminably. “That does not deal with the requirement to repay the capital and the amount drawn down in the first place.”

Seán Ó Fearghaíl (FF) said the Taoiseach had previously indicated to the House that the economic management council was seriously addressing mortgage arrears. Yet, Fiona Muldoon of the Central Bank had said the performance of the Irish banking sector was far from ideal or satisfactory. Mr Ó Fearghaíl said that about 23 per cent of mortgage holders were either in arrears or had their mortgages restructured following consultations with the banks. About 167,000 Irish families or individuals were affected.

He suggested that the Personal Insolvency Bill alone was not enough to solve the major problems confronting mortgage holders.

Mr Kenny said the role of the Cabinet sub committee on mortgage arrears was to oversee the effect of implementation, on a cross-departmental basis, of the Government’s response to the issue.

He said the deputy governor of the Central Bank, Matthew Elderfield, regulated the operation of the banks, and he had indicated that he did not consider it necessary at this time to seek further powers.

Joe Higgins (Socialist Party) said the proposals coming from the banks were for their benefit and not for the benefit of the thousands of owner-occupiers who were in difficulty.