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Free advice to be given to distressed mortgage holders

A panel of 1,000 accountants – paid for by the banks – will become available to mortgage holders from the middle of this month.

Image: Eamonn Farrell/Photocall Ireland

BORROWERS IN DISTRESS because of mortgage repayments will be able to avail of free and independent financial advice later this month.

Social Protection Minister Joan Burton announced the initiative this morning, stating the cost of the service will be met “wholly by the banks and other lending institutions”.

The advice will be provided by a panel of about 1,000 accountants drawn from the main institutes in Ireland who have agreed to participate. They will be available from mid-September to complement the new Citizens Information Board Mortgage Arrears Information Helpline and website, keepingyourhome.ie.

Mortgage holders who have been offered long-term resolution proposals will be eligible to receive the independent financial advice for free because the lender will pay the €250 fee. The choice of accountant still rests with the borrower.

Burton said the cost of the initiative could be up to €10 million, depending on the number of people who take up the new element of the Mortgage Arrears Information and Advice Service.

Long-term forbearance plans can include split mortgages, trade-downs, mortgage-to-rent and long-term interest only. The accountant and the borrower will be able to discuss each option over a number of meetings.

The number of mortgages in arrears in Ireland rose to its highest level to date last month with almost 130,000 home loans in trouble of some kind. More than 10 per cent of total private residential mortgages are in arrears of at least 90 days, an increase of about 5,600 in just five months.

“The Government is fully aware that there are no quick fixes or a one-size-fits-all solution to the mortgage debt problem,” Burton added. “Each family in mortgage arrears faces unique difficulties and we must have a range of solutions which can be adapted to resolve each family’s difficulties.

Encouraging people experiencing difficulties to contact their lender, she said the “key message is engagement”.

The Government is acutely aware of the difficulties that many households are facing in meeting their mortgage repayments and addressing these difficulties is at the forefront of Government’s agenda.

An operating protocol for the provision of this advice has been agreed between the accountancy bodies, the Institute of Chartered Accountants Ireland, the Association of Certified Chartered Accountants, the Institute of Certified Public Accountants and the lenders. The general scope of the advice will be limited to the borrower’s principal private residence. A review of how it is working will be carried out next June.

More: Seventh IMF review releases nearly one billion euro to Ireland>

Related: Mortgage arrears in Ireland rise to highest level yet>

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