THE MASTER OF the High Court Edmund Honohan has written a new bill which would give greater powers to the State’s financial and legal support services and stronger protections to people who are in mortgage arrears.

Honohan in his courtroom has been critical in the past of the behaviour of banks towards financially distressed customers and has on a number of occasions called out the government for failing to offer real solutions to repossession and eviction.

The bill, which was written by Honohan with input from academics and legal experts, will be lodged with the Ceann Comhairle’s office by Fianna Fáil’s John McGuinness tomorrow morning.

Entitled the National Housing Co-Operative and Fair Mortgage Bill 2018, it focuses on four main proposals to address the current crisis:

• The reconfiguration of the government’s Abhaile scheme, which currently provides free legal and financial advice to people who are in debt.
• The broadening of the mortgage-to-rent solution, to include ethically funded non-profit housing providers that are outside the public sector.
• The establishment of a national housing co-operative society with the powers to acquire, manage, rent or sell distressed mortgages, allowing the occupants to avail of the mortgage-to-rent model.
• A re-commitment to European Union law and the European Convention on Human Rights in relation to housing and in particular mortgage arrears.

The bill points out that there are legal rights that are currently in conflict,  such as a bank’s right to recover possession of a property versus the mortgagor’s right to fair treatment where non-payment is for reasons outside their control.

“There is an acute shortage of alternative accommodation anywhere and, in most cases, no alternative accommodation at all within a reasonable distance of such dwelling,” it notes. It also claims that despite public policy to keep families in their homes, the insolvency processes have proved to be “largely ineffective” in resolving debt issues without the sale of the debtor’s home.

If enacted, the legislation would give powers to the Abhaile scheme to make binding orders including the payment of interest only for a fixed period, the extension of the mortgage period, the deferment of payments or the fixing of interest rates.

It would also allow the body, which currently focuses on providing free legal and financial advice vouchers to people in debt, to order that a mortgage-to-rent solution is implemented.

The function of the new housing co-operative society, according to Honohan’s bill, would be to acquire housing that is at rick of repossession and redirect it to a non-profit housing provider who would then rent it back to the occupants, allowing them to remain in their homes.

The bill would allow the co-operative to pursue a compulsory purchase order if the bank does not accept the offer to buy the mortgage at a written-down price.

And it would enable courts to consider factors like whether an order for possession is justifiable by reference to a pressing social need - a housing shortage, for example.

Honohan has previously told people who appeared before him at risk of losing their homes to write to the Taoiseach to ask what they should do to avoid homelessness.

In December, he read out Leo Varadkar’s response to one man, which said the government is “acutely aware of the serious distress caused by mortgage arrears and is committed to assisting borrowers” to access solutions, where possible.

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