Michael Noonan says banks must do more to tackle issue of mortgage arrears

Monday 11 March 2013 22.48
Pearse Doherty wants debt writedown to be part of the proposals
Pearse Doherty wants debt writedown to be part of the proposals

Minister for Finance Michael Noonan has said the Government is insisting banks do more about the levels of mortgage arrears.

He said the situation has gone on for far too long and the Government is disappointed that tackling the problem has not happened sooner.

Speaking in Limerick, Mr Noonan said the banks now had the statistics, the menu of solutions and the properly trained staff to deal with the issue.

He said the issue of mortgage arrears had to be dealt with not only in the interest of those in arrears but also for the country.

The minister said you cannot have 100,000 families in a small country like Ireland unable to participate in the growth of the country because they are burdened with debt.

Mr Noonan said the Government wanted the pace of settlements to proceed over a set period of time.

In relation to recent comments made by Department of Finance Secretary General John Moran, the minister said Mr Moran as an accounting officer with the department is legally obliged to "tell it as it is, in an honest and straightforward manner" and he did that.

Mr Moran was criticised for comments he made to the Public Accounts Committee about people in mortgage arrears.

Speaking last Thursday, he said there is an "unnaturally low level of repossessions" of houses in Ireland and that the rate in Ireland was 0.25% compared with 3% in the UK.

Mr Moran told the PAC that the forbearance measures by the banks that resulted in the low repossession rate were necessary until a range of measures – notably the personal insolvency legislation – were in place to address the arrears situation.

The Government is to outline its proposals for banks to deal with the rising number of people in mortgage arrears this week.

Earlier, Sinn Féin Finance Spokesperson Pearse Doherty called for measures to protect family homes from repossession.

Speaking on RTÉ's Morning Ireland, Mr Doherty said the repossession of family homes should only be considered in "extreme" cases.

He said the Government has not indicated whether it will bring forward additional legislation protection for family homes, which is a concern for people in mortgage distress.

Mr Doherty said: "What we haven't got is a new list of measures that will show that the family home will be protected, will be out of reach of the banks and that certain actions would need to be taken by the banks before even any consideration of repossession.

"I think that's what's really annoying people."

He also said that debt writedown should be part of the Government's proposals, with a new independent statutory agency established that can "impose settlements over the heads of the banks and it can be legally binding".

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