The Interdepartmental Group on Mortgage Arrears - first leak

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Brendan Burgess

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Conor Pope has a [broken link removed]in today's Irish Times

It was anticipated the report would be published next week. This is now unlikely, however, as the report is with the Economic and Management Council, which will not be able to pass it on to the Cabinet before Tuesday week.


Good. No harm that a separate set of eyes takes an overview.



The group, ...will recommend the establishment of a debt relief scheme for struggling mortgage holders. But it is unlikely to produce any other concrete proposals.


I don't know what a "debt relief scheme" is.



Sources in the Department of Finance have moved to dampen expectations the report will contain any substantial measures aimed at helping struggling homeowners in the short term.


Sounds like there will be no debt forgiveness.



Among the proposals the group considered were: plans for banks taking houses and apartments on to their books and becoming landlords; the use of social housing organisations to take on ownership of properties;


I don't like this. If a mortgage is unsustainable, the home should be put on the market and sold. If the borrower gets to stay in it at the expense of the state, it is giving them a priority on the housing list.



temporary debt-for-equity schemes;



"debt for equity" schemes make no sense at all. But "temporary" debt-for-equity makes even less sense.


The most widely flagged proposals in the report will see the establishment of a new organisation to help homeowners negotiate with the banks over loans they are struggling to pay back.


While consideration had been given to expanding the remit of the Money Advice and Budgeting Service (Mabs) to give it a greater role in mortgage negotiations, the committee will instead recommend the establishment of a separate entity to guide individuals through the complexities of the process.

This is better than MABS getting involved and a whole lot better than having an independent appeals process such as the Credit Review Office.
 
This seems to be a mixture of strategies that ensure that the banks get their pound of flesh but the homeowners yield no drop of blood.
Banks becoming landlords allow the homeowner to maintain their position in society outwardly at least, while control of the asset passes to the banks.
It may not be fair or equitable to others in theory, but its likely "other" could not afford (or perhaps want) an over-the-top property.
It looks like an Irish solution to and Irish problem - a way to save face gracefully.
As such, it may be welcomed by those most affected.

It will also avoid a sudden glut in the property market.
Again, no bad thing in the current climate.
There will be a time to sell again.

It isn't now.
 
If a mortgage is unsustainable, the home should be put on the market and sold. If the borrower gets to stay in it at the expense of the state, it is giving them a priority on the housing list.

If the borrowers have to leave their house because they are unable to afford mortgage interest payments, I'd expect they would end up on the council housing list anyway. I'd rather see them stay in the house, not to save face, but it will be the cheapest option for the taxpayer.
 
Folks

Please stay on topic.

This is about the report of the Interdepartmental Group and their suggestions.

If you have your own ideas about solving the problem, do so in another thread.

Brendan
 
I see Enda Kenny is making pointed reference to the Report.

“The report furnished to the Government is not the repository of all wisdom.”

Hope he didn't pay too much for it so. :)

But of course he's really saying there will be a Government oversight on what to do with the Reports' findings.
 
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