Hundreds of Tipperary homeowners are still facing the threat of eviction over mortgage arrears, despite moves by the last Government to curb the practice.
The issue has come to light again with a number of cases listed in the County Registrar's Court which will sit in Nenagh on July 24.
One homeowner who says he is facing eviction due to the behaviour of his mortgage lender, told the Tipperary Star he was was looking at being made homeless despite paying €1,850 per month to the lending agency, which is controlled by a vulture fund.
The man, who is at the end of his tether, claims he had been paying back €550 per month to the agency for 18 months, but had upped that to €1,800 and now to €1,800.
“My back is to the wall,” said the man, who is self-employed and has a family to support.
He explained that his business went “belly-up” when the crash came in 2008 but he had gradually being rebuilding it and work was starting to pick up again. He had even done a Back-to-Work Scheme and was employing one person.
“Unless there is some leeway from the bank, I am going to lose my home and be out on the side of the road” he said.
The man built his home back in the early 1990s for €178,000 and kept up his repayments, but when the Celtic Tiger went wallop, he slid into arrears, which now amount to €75,000.
He estimates that with people walking away from paying for work done in the lead-up to the crash, he is owed roughly €64,000, which he hasn't a hope of collecting. And despite carrying out work only recently, it was still commonplace for people not to pay their bills.
The man had gone through a Personal Insolvency Agency in an effort to sort his arrears out, but that company had collapsed after it was taken to the High Court by the Central Bank.
Under the Personal Insolvency Act 2012, 65 per cent of creditors would have to agree to a Personal Insolvency Arrangment, which basically empowers the banks to veto the process suggested to manage arrears issues.
“The veto given to the banks by former Minister for Finance Michael Noonan, and then Minister for Justice Alan Shatter, was a clever trick. It gave the banks a loophole in dealing with secure and unsecured debt,” he said. “I am making a huge effort to repay, but there is a certain amount of bloodymindedness on behalf of the banks,” he said.
The Tipperary Star has seen a letter from the lending agency to the man stating that they would write off any residual debt if he were to give them vacant possession and the house was sold. However, if he did not agree to this, an order for possession would be sought.
It is estimated that there are over 54,000 mortgages around the country in arrears by over 90 days, with roughly 33,500 in arrears by more that 720 days.
“The case is just one of many coming to my office,” said Fianna Fail TD Jackie Cahill, who has called on the agency to meet with the homeowner halfway.
However, Deputy Cahill said that, as with most cases, he was “meeting a stonewall” with the agency.
“There has to be a moral obligation to sort out those who are making a genuine effort to repay their debts,” he said. “Some one has to be made sit down and deal with the person who is trying to pay back their loans.”
He pointed out that some people were paying mortgage interest at 5.4 per cent.
However, the Tipperary TD said that, with the upturn in the housing market, and with few affordable houses available to the market, the lending agencies and banks see a chance to make a capital gain.
“The banks can't expect to get their whole pound of flesh after they were bailed out by the people,” he said. “The system is not working when you can't stay in your house.”
Fianna Fail is proposing a Mortgage Resolution Bill before the Dail, but Deputy Cahill was not too optimistic about any legislation being passed by what he called an “impotent Dail”.
The Bill would see the creation of a Mortgage Resolution Office with the insolvency Service established under the Personal Insolvency Act 2012. Its decisions would be binding and there would be an appeals process for both the lender and the borrower.
One of its suggestions would be that the bank or lender would be prohibited from carrying on or initiating legal proceedings against the borrower.
Deputy Cahilll further stated that there was a need to create debt forgiveness for those making a genuine effort to repay their loans, even if that meant shifting some of the debt into the next generation.
And he questioned why we were seeing banks writing off debts for secondary properties but refusing to do so for primary residencies.
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