Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

/Photocall Ireland

Finance Committee tells Central Bank: legal letters to crisis mortgages aren't 'sustainable'

A draft copy of the committee’s report on mortgage arrears seen by TheJournal.ie contains strong words for the Central Bank.

THE JOINT OIREACHTAS Committee on Finance has strongly criticised the approach to mortgage arrears employed by the Central Bank.

In a draft copy of the Committee’s report into the mortgage arrears crisis, which will be published this afternoon, the Committee rejects the Central Bank’s acceptance of legal solutions as “sustainable”.

In the draft report, a copy of which has been seen by TheJournal.ie, the committee states that it:

…rejects the Central Bank’s general acceptance of legal solutions as “sustainable” and requests the Minister to step in in line with his own comments that legal letters are not satisfactory solutions.

The issuing of a legal letter to a borrower has been accepted by Dame Street as proof that the loan is being sustainably managed, and has allowed banks to shift large amounts of non-performing loans into the category.

Honohan defence

Appearing at the Finance Committee in April, Central Bank governor Patrick Honohan said that he sympathises with borrowers that have received letters from banks threatening legal action, but said it showed banks were deploying solutions.

At the time Honohan said: “Most of us agree that getting to grips with the problem is essential, even if the process of getting to grips with the problem is initially unpleasant.”

The report states that the Committee is “clear in calling for renewed vigour and purpose in accelerating the resolution of the mortgage appears crisis”.

Recommendations

Aside from rejecting the Central Bank’s acceptance of legal solutions as “sustainable”, the Committee recommends several further measures, including:

  • Every bank in the Mortgage Arrears Resolution Target (MART) process should offer the same solutions to lenders in difficulty
  • The Central Bank should analyse whether pressure to hit MART targets and avoid financial penalties is hindering the process
  • Solutions for borrowers in arrears whose properties are in positive equity should be considered
  • An urgent review of the Mortgage-to-Rent scheme is required, as it is not fit for purpose in its current incarnation
  • In “almost all cases” a borrower that has agreed to sell their home should not continue to be burdened with debt
  • Consideration should be given to a debt-for-equity solution, with the Central Bank responsible for cooking up an analysis of this strategy and potentially implementing a pilot study
  • An expanded role for the Financial Services Ombudsman

The draft report also casts a critical eye over the effectiveness of the MART process at keeping people in their homes, stating:

The Committee notes with regret the increasing number of people losing their family homes since the MARTs began and believes that the banks have failed to grasp the full potential of the process to reach fair and sustainable solutions which keep families in their homes.

Read: Honohan “not happy” about mortgage sales to vulture funds>

Read: ‘The entire system is rubbish’: Just 40 houses bought through mortgage-to-rent scheme>

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
22 Comments
    Install the app to use these features.
    Mute The Risen
    Favourite The Risen
    Report
    Sep 8th 2021, 2:43 PM

    “Reflect”? Just shows the arrogance of an organisation that thinks it still wields far more power and influence than it does. Lands amounting to the value of the debt still outstanding from the various child rape and assault scandals should be confiscated with the same vigor that revenue would come after you or I if we owed anything.

    422
    Install the app to use these features.
    Mute Tony Harris
    Favourite Tony Harris
    Report
    Sep 8th 2021, 2:48 PM

    @The Risen: True, but why ignore the other travesty, developers again getting a get out of jail card by their buddies in office????

    170
    Install the app to use these features.
    Mute That's FineGaelness
    Favourite That's FineGaelness
    Report
    Sep 8th 2021, 3:02 PM

    @Tony Harris: Who said to ignore developers getting a get out of jail free card?

    60
    See 4 more replies ▾
    Install the app to use these features.
    Mute Tony Harris
    Favourite Tony Harris
    Report
    Sep 8th 2021, 4:14 PM

    @That’s FineGaelness: I was referring to the comment above which ignored that bit!

    10
    Install the app to use these features.
    Mute Fachtna Roe
    Favourite Fachtna Roe
    Report
    Sep 8th 2021, 8:15 PM

    @Tony Harris: Because yer man in the photo isn’t wearing a hi-vis. :)

    1
    Install the app to use these features.
    Mute Ian Phillip Creaner
    Favourite Ian Phillip Creaner
    Report
    Sep 8th 2021, 8:49 PM

    @The Risen: i agree completely. But After you or me. You cannot come after “İ”.

    1
    Install the app to use these features.
    Mute Seamus Mac
    Favourite Seamus Mac
    Report
    Sep 8th 2021, 10:45 PM

    @The Risen: the state recommended that the church pay 50% of all the redress which the church did not agree to as they knew it was impossible. On the one hand you are saying the church is in decline but on the other they are supposed to have a financial standing equivalent to the state.

    9
    Install the app to use these features.
    Mute Dave Harris
    Favourite Dave Harris
    Report
    Sep 8th 2021, 2:50 PM

    The Bishop should take a good long look in the mirror while he’s “reflecting”
    How those supposed men of god can live with themselves I don’t know

    193
    Install the app to use these features.
    Mute Fiona Fitzgerald
    Favourite Fiona Fitzgerald
    Report
    Sep 8th 2021, 3:24 PM

    @Dave Harris: Indeed. He needs to reflect on the ban on birth control and the possible link with homeless families going hungry. No doubt they’d prefer to set up orphanages to export the children on commission.

    97
    Install the app to use these features.
    Mute Dorothy Giselsson
    Favourite Dorothy Giselsson
    Report
    Sep 8th 2021, 3:25 PM

    With the amount outstanding that these people owe their victims should they not just send in CAB to confiscate their assets in lieu of overdue debts?

    126
    Install the app to use these features.
    Mute Pádraigín O'Sirideáin
    Favourite Pádraigín O'Sirideáin
    Report
    Sep 8th 2021, 3:06 PM

    The church should hold no land, they should hold no wealth, if they were real Christian’s they would gladly give land to build social housing… but no, they’ll reflect on it and hope the publicity will go away, no wonder mass attendance numbers are dwindling. Shame on the church again.

    173
    Install the app to use these features.
    Mute Mary Walshe
    Favourite Mary Walshe
    Report
    Sep 8th 2021, 4:30 PM

    @Pádraigín O’Sirideáin:
    So much for vows of poverty!

    72
    Install the app to use these features.
    Mute Irish big fellow
    Favourite Irish big fellow
    Report
    Sep 8th 2021, 3:12 PM

    How much does the church still owe the state to pay for the agreed portion of financial compensation already paid out by the government to those who were victims of abuse by the members of the clergy?

    116
    Install the app to use these features.
    Mute Robert Stevens
    Favourite Robert Stevens
    Report
    Sep 8th 2021, 2:42 PM

    The money was just resting in my account

    82
    Install the app to use these features.
    Mute JusticeForJoe
    Favourite JusticeForJoe
    Report
    Sep 8th 2021, 7:41 PM

    @Robert Stevens: It was resting for a long time, Ted! Good long rest!

    8
    Install the app to use these features.
    Mute Amadán
    Favourite Amadán
    Report
    Sep 8th 2021, 3:45 PM

    I hope they do give the land…on the stipulation that it will be turned into social housing.
    Because, you know O’Brien and every other minister will develop the builds and then hand them over to parasite landlord class.

    95
    Install the app to use these features.
    Mute Tony Harris
    Favourite Tony Harris
    Report
    Sep 8th 2021, 4:16 PM

    @Amadán: Excellent point, well made.

    36
    Install the app to use these features.
    Mute JusticeForJoe
    Favourite JusticeForJoe
    Report
    Sep 8th 2021, 7:41 PM

    @Amadán: This is exactly it

    8
    See 1 more reply ▾
    Install the app to use these features.
    Mute JusticeForJoe
    Favourite JusticeForJoe
    Report
    Sep 8th 2021, 7:42 PM

    Why you’re not an Amadán at all!

    5
    Install the app to use these features.
    Mute NoPlanetB
    Favourite NoPlanetB
    Report
    Sep 8th 2021, 3:24 PM

    Do a Henry VIII reboot: Dissolution. Widespread state seizure of church lands for Social housing. Much of this land was gifted to the church in any case by Builders when they built an estate and land for church use was made available for a nominal fee. The house owners themselves paid for it whether they liked it or not.

    56
    Install the app to use these features.
    Mute Joseph Duggan
    Favourite Joseph Duggan
    Report
    Sep 8th 2021, 3:46 PM

    Wonder could the church show us the deeds of.all the land they have control of

    52
    Install the app to use these features.
    Mute JusticeForJoe
    Favourite JusticeForJoe
    Report
    Sep 8th 2021, 7:43 PM

    @Joseph Duggan: I’d be interested

    10
    Install the app to use these features.
    Mute Joseph Duggan
    Favourite Joseph Duggan
    Report
    Sep 8th 2021, 3:49 PM

    Biggest private landlord in the world vatican

    52
    Install the app to use these features.
    Mute Ivan Genockey
    Favourite Ivan Genockey
    Report
    Sep 8th 2021, 4:19 PM

    The minister should just take the land off the church for all the pain and misery they caused.
    After all they didn’t even pay up.

    58
    Install the app to use these features.
    Mute Amadán
    Favourite Amadán
    Report
    Sep 8th 2021, 3:43 PM

    Or, it could be more likely that they have to talk to the individual Diocese about what can be done. Those in said diocese, ordained and laity will have to be consulted.
    That’s before you get into the different orders and some that will have to go to the Vatican.
    It’s not the hegemony orginistion people think it is. It’ll take time. Probably looking at about a year.

    21
    Install the app to use these features.
    Mute Fred spins kdb
    Favourite Fred spins kdb
    Report
    Sep 8th 2021, 2:48 PM

    Hes the bulb off piers Morgan.

    24
    Install the app to use these features.
    Mute Garreth Byrne
    Favourite Garreth Byrne
    Report
    Sep 8th 2021, 4:39 PM

    Centre right and centre left governments in Ireland have operated from a base assumption that the housing demand can be left to ‘the market’. In the early 1930s FF earmarked large sums of money to local authorities for the construction of houses for people on low incomes. But that was a temporary aberration; since then the Hidden Hand of the Market has held economical sway. Catholic Bishops and lay Catholic theologians can examine papal encyclicals etc and see if the Hidden Hand concept can be morally challenged. I hope that will be a significant aspect of the Bishops’ declared ‘reflection’.

    12
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds