Speaking today following exchanges with the Minister for Finance Michael Noonan Sinn Féin finance spokesperson Pearse Doherty called on the government to establish a distressed mortgage resolution body with statutory powers.
The Donegal South West TD said that only such a body, equipped with appropriate powers and policies would be able to tackle the growing mortgage distress crisis.
Deputy Doherty said:
“The latest figures from the Financial Regulator on the mortgage crisis are truly shocking. At the end of June there were almost 100,000 households in serious mortgage distress. This means that nearly 700 families a week are falling into arrears now.
“This figure does not include those struggling to pay their mortgage at a time of rising prices and increasing government charges and at risk of falling into distress.
“Statements from the Minister for Finance this week demonstrate that the government does not appreciate the urgency of the situation and the need for firm government action.
“It is Sinn Féin’s view that the government must move to create a new, time-limited, distressed mortgage resolution body. Such a body would be an independent arbitrator tasked with reaching resolution agreements for those in mortgage distress. While such agreements between lenders and borrowers should be on the basis of joint agreement, the resolution body should have the power to impose agreements.
“The remit of the body would be to assess each case of mortgage distress on its individual merits and recommend sustainable resolutions. Three principles would underpin a range of options available to the resolution body.
“In the first instance, to assist the mortgage holder maintain their primary family residence. Options to achieve this would include reductions in the size of the mortgage, which may be accompanied by mortgage lenders taking an equity share of the home.
“However for those families who do not wish to remain in the family home or where such an option would not be financially sustainable a range of other options would be available, including short selling, trade ups, trade downs and social and voluntary housing.
“Finally, underlying these two principles will be a commitment to burden-sharing by mortgage holders, mortgage lenders and inter-bank commercial lenders. Sinn Féin’s proposals will not only require mortgage lenders to absorb a significant portion of the losses on the value of mortgage. We also propose inter-bank lenders should absorb their share of the losses.
“Our proposals will deal with issues such as the impact of overall household debt on mortgage distress and the need for ‘fresh start’ reform of our bankruptcy laws.
“The full detail of Sinn Féin’s proposals will be launched next week. However we believe that the government must act urgently if they are to address the needs of the 100,000 families currently in mortgage distress and prevent thousands more falling into a similar situation.”