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Mortgage proposals short on detail, short on solutions – Doherty

12 October, 2011 - by Pearse Doherty TD

Responding to the publication today of the government’s long awaited Inter-Departmental Mortgage Arrears Working Group report, Sinn Féin’s finance spokesperson Pearse Doherty said that the groups recommendations were “a deep disappointment” and were “short on detail and short on solutions.”

Deputy Doherty said:

“Today’s report from the Interdepartmental-Working Group Mortgage Arrears is a deep disappointment, particularly for the 100,000 or more families currently unable to service their mortgage repayments. The report completely fails to understand the depth or the urgency of the problem. It also fails to provide anything close to a comprehensive solution to the issue of mortgage distress.

“The report proposes a number of schemes such as split-mortgages, mortgage-to-rent and mortgage-to lease which if established may assist a small number of people in mortgage distress. It also proposed a strengthened mortgage advice service for those in distress.

“However its core proposal is to leave those in mortgage distress at the mercy of the banks and saddled with decades of unsustainable debt. Across the country tens of thousands of families who have been waiting to hear what the government intended to do will today be plunged even deeper into despair.

“After three expert group reports produced over almost two years it is incredible that the reports main conclusion is to leave the resolution of this problem to the banks. Clearly the government has learnt nothing.

“While rightly ruling out a blanket debt forgiveness scheme for all those in negative equity as unaffordable, the report fails to even consider more targeted debt resolution and restructuring mechanisms such as debt-for-equity swaps, or other proposals that would be overseen by an independent distressed mortgage resolution body.

“Considering the billions of Euros of public money given to the banks by both the last and current government there is simply no credible argument against the banks shouldering their fair share of the burden of mortgage distress.

“It is also worth noting that the report explicitly rules out a number of proposals that the Fine Gael and Labour government have committed itself to in its Programme for Government. Increasing mortgage interest supplement is ruled out. Extending mortgage interest relief is ruled out. Transforming MABS into a personal debt management agency with strong legal powers is ruled out. There are also no proposals dealing with insulating mortgage holders from ECB interest rate rises.

“It is also unclear how the proposed mortgage-to-rent and mortgage-to-lease schemes will be funded and what impact this funding will have on the already depleted local government housing budgets.

“During next week’s debate Sinn Féin will take the government at its word and outline a series of additional proposals which we believe do provide the basis of the comprehensive solution needed by those families most at risk of losing their homes.

“Widespread forbearance is not an option. Leaving this matter to the banks is not an option. Serious consideration must be given to targeted debt resolution and restructuring with banks absorbing part of the cost in order to enable people to protect their family home.”

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