Kenny unhappy on arrears resolution

Taoiseach Enda Kenny has said he is not happy with the banks’ “level of resolution’’ in dealing with distressed mortgages.

He said reports had come from the banks, particularly the two pillar banks, of decisions arrived at to assist mortgage holders.

“Many of these decisions have been to make the mortgages interest-only for a period, which is not a long-term solution to this problem.’’

Mr Kenny said he had listened last weekend to Central Bank governor Prof Patrick Honohan, who had spoken of his frustration about the extent of engagement and decisiveness by the banks on the issue.

The Taoiseach was replying to Fianna Fáil leader Micheál Martin, who said there were now more than 180,000 residential mortgages in some form of distress or difficulty. Some 20,000 mortgages were in arrears for more than two years, and some 86,000 were in arrears for more than 90 days.

Mr Martin said Prof Honohan had said he and others in the Central Bank were tearing their hair out.

“I suggest many people across the country are tearing their hair out at the lack of any progress on this issue.”

He said many members of the House met families in deep distress who were making reasonable efforts to cope with their situation but who were not getting a sufficient response from the banks.

Mental health issues

He added that there was a strong correlation between mortgage arrears and mental health issues, and there was a genuine crisis at this time.

People, he added, wanted to pay their debts, but they needed the space and capacity to do so.

“We need innovative and radical solutions. Some economists have suggested a permanent interest rate reduction, which would enable the banks to get all of their capital back at a more affordable monthly rate.’’

Mr Kenny said he welcomed Mr Martin’s new-found focus on dealing with the complex problems facing the State.

“One would swear that the governor of the Central Bank did not have to make a telephone call from a street corner in Frankfurt a few years ago to say the IMF was in here.’’

Mr Kenny said that, on behalf of the Government, he had written to the regulator 18 months ago to ask him if he required further powers.

He said the regulator made it clear he did not need further powers at that time.