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THE GOVERNMENT IS working on a range of measures to help those in mortgage distress during Covid-19 as well as assisting them to avoid the repossession of their home if matters escalate, the Department of Housing has said.
Sinn Féin housing spokesperson Eoin Ó Broin, however, has warned that an important measure that could be used to tackle repossessions – a non-judicial court for those in mortgage arrears – hasn’t been included in this programme for government.
It comes as Central Bank figures last month showed that there were 64 homes repossessed in the first three months of this year, and fears have been raised that the number of those in mortgage arrears will rise as a result of Covid-19.
A department spokesperson told TheJournal.ie that Minister for Housing Darragh O’Brien has previously expressed concerns about home owners falling into arrears as a result of Covid-19.
The spokesperson said that, among a number of supports, a commitment was made in the programme for government to continue funding Abhaile – a support service for borrowers in home mortgage arrears – and the Mortgage to Rent scheme.
Sinn Féin’s Ó Broin, however, said a non-judicial court was originally included in Fine Gael’s last programme for government in 2016, not acted upon over the last government and doesn’t make an appearance in the new programme for government.
“While Fine Gael never implemented that, we really need to seriously look at the best mechanism at solving these problems now,” he said.
Repossession figures
The number of homes repossessed in Ireland peaked at a high of 1,693 in 2016 according to figures from the Central Bank. This number referred to what are called “principal dwelling homes”, which are simply homes where the owner or owners live in them.
In 2015, there were 1,535 homes repossessed. Of these 1,299 were repossessed by the banks. Digging into the stats further, just under half of these (603) were repossessed on foot of an order while the rest (696) came from homes being voluntarily surrendered or abandoned.
According to the Central Bank statistics, the proportion of homes voluntarily surrendered or abandoned is usually higher.
In 2018, 628 of the 878 homes were repossessed voluntarily. In 2019, there were 535 homes repossessed in Ireland. Of these, 144 of them were repossessed on foot of an order with the other 391 properties voluntarily surrendered or abandoned.
In the first three months of 2020, there were 64 homes repossessed in Ireland. Statistics aren’t yet available for April, May and June.
Under Central Bank guidelines, the code of conduct for borrowers states that legal proceedings to repossess a home can only be initiated “where it has made every reasonable effort to agree an alternative payment arrangement” or where “the borrower has been classified as not co-operating”.
In answer to a recent parliamentary question, Minister for Finance Paschal Donohoe said that “during the legal process, borrowers have opportunities to re-engage with lenders to find a solution” but “in some circumstances loss of ownership may be unavoidable”.
Solutions
The Department of Housing said Minister O’Brien is aware that Minister Donohoe is reviewing the code of conduct to ensure that sufficient supports are in place for mortgage holders with repayment difficulties.
A spokesperson also said that the department was looking at a number of measures to help people in danger of losing their homes, including the mortgage to rent scheme (MTR) and the Abhaile service.
“The MTR scheme is targeted at those households in arrears whose mortgage is unsustainable and who are eligible for social housing support,” the spokesperson said. “Under the scheme an eligible household with an unsustainable mortgage goes from being a homeowner to becoming a social housing tenant remaining in the family home and paying an affordable rent based on their income.
From 2012 to the end of June 2020, 691 families comprising 1,182 adults and 1,163 children have remained in their homes under the scheme.
A renewed commitment to the scheme was included in the programme for government. The MTR scheme had been reviewed in 2017 and the department said amendments had been made to improve its operation.
Ó Broin, however, told TheJournal.ie that MTR had been a “peripheral scheme” under previous governments and would continue to be so unless it underwent serious reform, with many banks refusing to engage in such cases.
He said: “The last programme for government had a commitment to a non-judicial court. The idea for it was to be a fair and balanced process. Now, you’ve to deal directly with the banks and the courts.”
He said the current system puts massive strain on lower-income families engaging with this process.
One reason for low levels of repossession in recent years has been that many of the mortgage holders were in negative equity, according to Ó Broin. But, as the value of properties has risen sharply, a number will have risen into positive equity meaning there’s a greater profit to be made for vulture funds, in particular, who purchase the distressed loans.
“A non-judicial mortgage resolution would be effective in keeping families in their homes,” he said.
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There’s an awful lot of people in this country that have worked hard to be able to get a deposit together to buy a home and pay a mortgage. Though no fault of their own, they seen their pay decimated and jobs disappear. There should be a total ban on repossession proceedings starting until 18 months after the Covid crisis is declared over. No point in compounding an already terrible housing situation by make more people homeless. There’s very few “legitimate” buyers out there to buy repossessed houses at the moment. We’ll be left with foreign vulture funds buying up our housing stock.
@Nomad: what about the cases where a tenent can and just refuses to pay rent? Should they even though they have the money to pay just refuse. What should happen to those people?
@Chris Mc: I’m talking about honest and hardworking people – anyone taking the p1ss should be dealt with accordingly.
people are unable to pay a mortgage on €203 a week and should definitely get help,
and as usual it’ll be the landlords to get financial help, not the tenants…
@Mr A: what financial help do you think landlords are getting or get? Right now they cannot do anything about tenants not paying rent
@Craic_a_tower: untrue. There is financial assistance to landlords. The first is the mortgage break and the second the same available for other businesses and self-employed. The RTB has assisted them, the landlords, to get this money.
The expectation is the landlords transfer it to the tenants, by rent breaks, rent reduction and writing off rent in arrears. There isn’t any reason for kicking a family out of their home. Only the Dole landlords are trying to kick out people before the Authorities Carey’s out checks, a screening
If there are people who claimed the PUP four times …. It is realistic to landlords have done similar fraudulent claims …. the only way to get away with it is by creating a tsunami of homelessness
We’ll see what the Cabinet decided today, would they go against the Health executive?
@Maria Quinn: I asked a question so how is it untrue? The mortgage break costs money the landlord pays. The RTB are not giving money to landlords. Why do you expect landlords to subsidise people and take a hit? You seem to be under the impression it costs them nothing. If somebody isn’t paying rent who exactly do you think should foot that bill? Are you expecting any other industry to give their services for free? Or paying for something seems like a very valid reason to not provide a service.
If people are acting fraudulently what has that got to do with landlords? My tenants are getting more money as they are students only allowed work a limited time but getting full PUP. Why would I reduce their rent?
@Craic_a_tower: some people don’t understand how it works so they take their anger out on landlords.
The valid argument for them would be to state that government should ban investment into residential property apart from if its your own primary residence.
Otherwise by just saying landlords should foot the bill is akin to them saying a person who say invested €100K into a Dominos pizza franchise should give out free pizza.
@Mr A: what financial help exactly do landlords get
The solution is instant affordable legal assistant. People needs a solicitor to assist them to renegotiate the mortgage, to engage with the banks at earlier stages.
The creation of a quasi-judicial body without providing solicitors wouldn’t resolve anything at all.
Banks are not employers, neither landlords. Banks and financial institutions are heavily regulated, screens and controlled.
The language and formalities are the issue, the ability to get a solicitor is crucial for these families
Free Legal Aid has waiting times of over a years, 56 weeks in same centres. They do not take “property” cases, meaning any case to help the people keeps their homes, both owner and tenants. They are by Law banned in quasi-judicial bodies. In quasi-judicial bodies a team of barristers and solicitors are permitted …. like a Court room … but without the chance to be refunded for the legal costs …. and as private solicitors say – there isn’t any money in quasi-judicial proceedings, they don’t worthy their time-
And then, there is a specific free legal aid for those who face deportation ….. pure non sense …. people can stay in the country but people cannot stay in their homes, totally absurd
If they can place a ban on renters being evicted the same should apply for home owners
It’s one rule for the tenters and another ridiculous rule for homeowners
have your say