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Over 4,000 borrowers flock to voucher scheme in bid to save their homes

Figures released to TheJournal.ie demonstrate the “massive” scale of the mortgage arrears problem, according to one expert.

MORE THAN 4,000 households in mortgage arrears have received assistance in the first year of a government scheme aimed at keeping people in their homes.

Figures provided by the Department of Justice to TheJournal.ie show 7,246 vouchers have been issued to homeowners who are in arrears since the inception of the Abhaile scheme in June last year.

Paul Joyce, senior policy analyst at the Free Legal Advice Centre (Flac), has said he is not surprised by these figures as they demonstrate the “massive” scale of the mortgage arrears problem in Ireland. He said Abhaile “came too late, but it’s better late than never.”

“We’ve been at this for a decade plus now, very slow, very piecemeal, a bit of this and a bit of that, but not the sort of comprehensive approach to solving this quickly that might have been adopted elsewhere,” he said.

There are three different types of legal advice and assistance available to homeowners under Abhaile and they can take up one or more depending on their circumstances.

The department said the service focuses on providing financial advice initially, to ensure expert analysis of the borrower’s financial situation and identify possible solutions.

“Legal advice is normally the second step, and the consultation solicitor is provided in advance with the financial analysis and written financial advice.”

The highest number of vouchers, 5,515 over the one year period, were issued for financial advice and assistance. There were 1,566 provided for legal advice and assistance, in the form of consultation with an Abhaile solicitor and written legal advice.

Legal aid was also approved for personal insolvency court review in 165 cases where the lender had refused a proposal by the borrower.

In total, 4,277 homes were covered by this voucher scheme since June last year.

Threatening letters

Abhaile has shared a number of case studies of homeowners who were helped by the service, including the story of Joan, who had been struggling to pay her mortgage for a number of years after taking a pay cut in work.

She was referred to the Money Advice and Budgeting Service (Mabs), which runs Abhaile. The service dealt directly with the bank on her behalf which she said “put an end to all the letters telling me I owed arrears dropping on my doormat”.

That in itself was a huge thing because the letters weren’t nice and were very upsetting to read.

As a result of the service’s intervention, the bank restructured Joan’s mortgage and offered her monthly payments she could afford.

Orla and Dave also received assistance from the service. They had been in arrears for a number of years on both their mortgage and credit union loans.

“We tried to pay a little off each to keep everyone happy, but we were getting calls mostly about the mortgage. It’s a vicious circle when you are trying to pay as much as you can,” Orla said.

My husband suffers with depression a bit, but the banks didn’t want to know. One day I received a letter from the bank threatening us with repossession. I rang and pleaded with them saying “I don’t want my husband in the grave”, but there was no change in their approach.

She said they felt “like criminals” but when she eventually contacted Mabs, she felt an instant sense of relief.

The service dealt with the bank on their behalf and negotiated a deal.

“I could actually see the relief in my husband’s face – that some weight had been lifted.”

Repossessions

Central Bank figures for the last three months of 2016 showed a total of 77, 493 accounts were in arrears at the end of December – a decline of 2.6% compared to September last year.

Flac analyst Paul Joyce said it is particularly concerning that more than 33,000 borrowers have been in arrears for over two years.

“What’s happening is that the number of accounts in arrears has decreased quarter-on-quarter since 2013, but the proportion of accounts in arrears of over two years has correspondingly increased,” he noted.

Arrears have “gotten deeper”, too, according to Joyce as Central Bank figures show the average figures for accounts in arrears over two years was €66,000 at the end of last year.

“Of course there are many people under that, but there are people over it too.”

During the last quarter of 2016, legal proceedings were issued to enforce debt or security on a principal dwelling house mortgage in 1,397 cases. In 271 cases, the courts granted an order for repossession or sale of the property.

A total of 455 properties were taken into possession by lenders during the quarter, the highest recorded since the series began. Of the properties taken into possession during the last three months of 2016, 112 were repossessed on foot of a court order, while the remaining 343 were voluntarily surrendered or abandoned by homeowners.

The Department of Justice said that over the last year Abhaile solicitors were also present at 313 Circuit Court repossession lists around the country to assist unrepresented litigants facing repossession proceedings and they assisted 1,028 borrowers.

Court mentors – lay support staff from the Mabs - also attended all Circuit Court repossession lists countrywide during this period to meet and help unrepresented borrowers.

‘It’s very serious’

Though Joyce said schemes like Abhaile are welcome, he said further information about outcomes is needed, to evaluate whether the help these vouchers paid for will actually keep people in their homes longterm.

He said the introduction of the Mortgage Arrears Resolution Process (Marp) has made a difference as it has put in place a framework for lenders, telling them what is expected of them when dealing with customers who are in mortgage trouble.

However, he said this has not been “properly policed” by the Central Bank. “It has taken creditor adherance at face value and rarely spoken to debtors about their experience. No lenders have been sanctioned.”

The number of borrowers who made arrangements and then failed to stick to them is increasing.

“They’re failing fairly quickly and that means the terms are putting too much pressure on the households.”

He said the government needs to start addressing this problem with longer-term goals in mind.

“In a situation where there is no accommodation available either in social housing or private rented accommodation, we need a different solution for these 33, 500 borrowers in arrears for over two years. It’s very serious.

“The number of repossessions of late is relatively small, but nonetheless there are a lot of cases before the courts and are they going to be resolved without the loss of a home?”

Read: The average first time buyer in Ireland is 34 years old and needs at least a €50,000 deposit>

Read: House prices set to grow by 10% this year>

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32 Comments
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    Mute John003
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    Jun 8th 2017, 12:13 AM

    Could I have a house in Rathmines please….With a nice big back garden…Fed up paying a mortgage don’t want to anymore….

    266
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    Mute Tony Daly
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    Jun 8th 2017, 8:34 AM

    @John003: that is not a sensible contribution to an important issue. It is mindless trolling for a reaction. My only reaction is one of pity for you.

    68
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    Mute Tony Skillington
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    Jun 8th 2017, 9:06 AM

    @John003: there’s a very big difference between being not being able to and not wanting pay your mortgage. Most people ate happy to pay their way but when circumstances change, they’re unable to.

    50
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    Mute @mdmak33
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    Jun 8th 2017, 1:02 AM

    €10bn was given to banks for mortgages in distress yet no report of anyone being helped from the fund.where did it go.can some journalist find out.rumour is banks used it for their own pension funds,that’s embezzlement.

    180
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    Mute @mdmak33
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    Jun 8th 2017, 1:05 AM

    Where did the €10 bn go banks were given for mortgages in distress.no one received help from it.banks pension fund?which is embezzlement

    129
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    Mute Diogenes
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    Jun 8th 2017, 12:11 AM

    Hmmm, when are certain people’s assistance more equal than another’s? When they own a home of course, can’t wait till I own a home so I can be viewed as a more elevated citizen than those undesirable ones that still have to rent.

    128
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    Mute Catherine Mc
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    Jun 8th 2017, 12:41 AM

    @Diogenes:
    The vast majority of house owners are paying their mortgage often on reduced incomes or one person losing their job by doing without. If I were you I would not be in any hurry to be up to my neck in debt, those people who are now getting help, some people agree with it, others don’t. Trust me once you own a property that’s it, government thinks you are well off, property tax etc

    151
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    Mute Joseph Bloggs
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    Jun 8th 2017, 6:45 AM

    @Catherine Mc: the vast Majority? Please provide facts that show over 50% of homeowners are struggling with the hardship you have just described.

    33
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    Mute Nick Allen
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    Jun 8th 2017, 7:21 AM

    @Diogenes:

    Yeah, maybe we should scrap rent allowance and other benefits received by non home owners and stop home owners paying property tax. You could possibly look into getting rid of a lot of the social welfare payments too, as many of these are used and abused by non home owners. Then we can all feel like equal citizens rather than us home owners looking at the other elevated citizens. Time to get that large chip off your shoulder!

    38
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    Mute Mary Murphy
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    Jun 8th 2017, 7:39 AM

    @Diogenes: who do you think is paying for this????

    16
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    Mute Diogenes
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    Jun 8th 2017, 10:29 AM

    How can people in the comments section condemn people who are either looking for rental assistance or are homeless and looking for a house, while suffering from collective amnesia when receiving assistance from the government for their mortgage. Both groups of people are receiving free assistance from the government.

    6
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    Mute The Guru
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    Jun 8th 2017, 3:19 AM

    Are there any schemes to stop people getting into foolish debt situations in the first place. I’m seeing a lot of people my age (30′s) paying well over the odds for property because they’re still obsessed with the dream of ownership. They’re just going to become the next lot of people who need these services and will blame everyone else but themselves.

    114
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    Mute Joseph Bloggs
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    Jun 8th 2017, 6:54 AM

    @The Guru: great question. The school of ‘responsible for my own actions’ needs more lectures and many more students to take notes.

    67
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    Mute WilhelminaMCallaghan
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    Jun 8th 2017, 2:17 PM

    @The Guru: not everyone is like that some of us had work and a normal life . Got in trouble because the work was gone . Not everyone has savings , credit and the banks help no one . I was happy as a tenant the bank took my landlords house and basically made me buy or get out . It is really hard to move when you alone and logistics were not on my side . I believed what they said . Used all I had to buy the house I already lived in . They said in the evaluation the house was sound . For the first three years it was fine Then everything went to hell , the house went to bits Job gone . I’m sure I am not the only person who is familiar to this .

    11
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    Mute Darren Norris
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    Jun 8th 2017, 7:09 AM

    If repossessions happened in Ireland the market would have been fairer and solved itself quicker

    54
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    Mute abcyz
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    Jun 8th 2017, 12:06 AM

    Social housing now for individuals and families. No more using HAP schemes for over 6 months. Stop putting homeless into new family hubs to leave them there for possibly God knows how long or years to come.

    49
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    Mute abcyz
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    Jun 8th 2017, 12:10 AM

    FF provide this and one off houses in the countryside for those it would suit like what happened up until the crash. FF better get increase social welfare by 10-20 euro a week for the vulnerable especially the disabled or you will get what the Labour liers got.

    28
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    Mute Suzie Sunshine
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    Jun 8th 2017, 12:32 AM

    @abcyz: increase social welfare by €20 ?

    34
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    Mute iohanx
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    Jun 8th 2017, 4:10 AM

    “massive scale”, utter nonsense. 2 million properties in the country, approx 700,000 mortgages. There will always be percentages in any economy in difficulties. 4000 is not massive as a percentage in the overall picture

    44
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    Mute Gulliver Foyle
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    Jun 8th 2017, 6:44 AM

    @iohanx: and it’s probably always been that figure based on unemployment churn. What is a “voucher” anyway. It seems like a payment for a one off counseling session with a lawyer? Can anyone else not see a problem with ex-lawyers throwing out state money for sessions with their buddies, that you could probably get from a webpage, that leads to more court action against finance companies that are usually state owned?

    32
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    Mute Gus Sheridan
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    Jun 8th 2017, 6:26 AM

    Lets keep the recovery going………………..Enda Kenny

    41
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    Mute et
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    Jun 8th 2017, 5:54 AM

    Big fat greedy landlords, buying up so many properties and charging as much as they want for rent with no limits whatsoever. Why can’t our housing ministers put a stop to this?? Cap the rent charges and at least allow people to save a little or why can’t it go back to the times when all houses were rented from our local corporation/council? Go back to basics and stop making everything more complicated!!!

    43
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    Mute Thaddus T Sawballs
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    Jun 8th 2017, 7:44 AM

    While seanie goes grinning to the golf. Course

    25
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    Mute Brian MacCarthaigh
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    Jun 8th 2017, 12:30 AM

    What?? First I heard of this!!

    23
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    Mute ray.farrelly
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    Jun 8th 2017, 12:43 AM

    There need’s to be another uprising in this country.

    56
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    Mute WilhelminaMCallaghan
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    Jun 8th 2017, 8:01 AM

    I know nothing about no voucher .
    Mans did nothing for me when I was in serious trouble because I had a boss who underpay me and that was way before recession.
    I went to prima finance they help you .
    I am in receipt of no benefit never have don’t know a thing about them.
    All I know is I pay my agreement yet the. And trick you and deny you have an agreement then they threaten you and send you to court and threaten you more and all the way you still struggling and sometimes starve even to pay for this thing nevertheless the ulster bank sell your mortgage to a vulture fund . Now is this other crowd and you still paying and yet they still carry on with this court thing . I can’t afford court I don’t have a solicitor .my house is half derelict since snow 2010 pipes burst and insurance gave me less the half of the damages I was done by the builder who destroy the place . But it is the only house I have . All I can do is keep paying . But I have to say I live in fear I don’t sleep and worry all the time . I ha e no way out no way of repair the house and if I get thrown out no way of getting another one . But I am not rich . So I don’t mater .

    21
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    Mute Mo Nishi
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    Jun 8th 2017, 7:48 AM

    Be nice if we had an explanation of what these vouchers actually are. Are they like butter vouchers ? Are they in green rather than yellow ?

    17
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    Mute Tony Daly
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    Jun 8th 2017, 8:37 AM

    When the Banks, especially AIB, achieve all of the repossessions, where will the dispossessed families be accommodated and at whose expense?

    The Bank always wins.

    17
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    Mute leonard byrne
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    Jun 8th 2017, 11:39 AM

    What about all the people whi have struggled to actually keep up there mortgage payments by going without and having barely enough money for food? Wheres the help for these honest citizens? Probably better off not paying and keeping your fancy car and two holidays a year!!!

    13
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    Mute Suzie Sunshine
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    Jun 8th 2017, 8:54 PM

    @leonard byrne: that’s why the system is all wrong ..

    1
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    Mute WilhelminaMCallaghan
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    Jun 8th 2017, 8:03 AM

    Sorry autocorrect: MABS did not for me

    4
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    Mute James Doyle
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    Jun 8th 2017, 7:15 PM

    And the Government are allowing another mortgage bubble with house prices rising at 10% pa, wages and salaries rising 4% max before tax, prsi, usc. Same scenario as before the crash of 2008, interest rates have only one way to go and that is up. So the 32000 household’s in arrears for 2 years will soon be joined by 1000′s more from the 2017/8/9 bubble in house versus wage increases. When will the Irish ever learn. I hope the Troika are watching what is yet again going on in Paddy fairy land, in relation to house price’s.

    3
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