THE MASTER OF the High Court has criticised the government for failing to deliver on structures it promised that would help keep people in their homes.
Edmund Honohan is known for being tough on the government and on banks, but in his court yesterday he launched a particularly scathing attack on the Mortgage-to-Rent and Abhaile schemes. He also poked fun at a letter the Taoiseach had sent in reply to one of the lay litigants before him.
Honohan was hearing applications from a number of lay litigants (people representing themselves in court) in relation to possession orders that had been granted to their banks.
In one case, involving EBS Limited and a Mr McMahon, the Master heard that the man and his partner had been in the house 11 years, that they have two children and another baby is on the way.
He told the Master that he had contacted the bank six months before the first missed payment to try to reach a sustainable arrangement but he “got absolutely nowhere”.
“If it had been dealt with at the start, we wouldn’t be in this position in the firstplace,” he said.
Honohan made reference to the government’s Mortgage-to-Rent scheme, which allows debtors to remain in their homes as renting tenants if their bank agrees to let a housing agency to buy the property.
The Master said this scheme is “now in serious doubt” as he told the court that a registrar in Naas had indicated this week that she was no longer happy to accept an application for the scheme as grounds for an adjournment.
He said the government “promised Mortgage-to-Rent, but have not delivered”.
The courts have been spending the last, I don’t know, at least four years encouraging people to apply for Mortgage-to-Rent and delaying cases to ensure the best opportunity is given to people like the McMahons to avail of a scheme the government has promised.
“If the government is not going to deliver on it, then it should say so.”
‘A scam’
Honohan also referred to the government’s Abhaile scheme, which offers vouchers to people who are in debt so they can seek legal or financial advice, as “a scam”. He said the scheme had been set up so the government could avoid having to fund a proper legal aid system.
Thousands of struggling mortgage customers have received vouchers through this scheme, but these vouchers only cover the cost of an advice session, not the cost of hiring a solicitor and barrister to represent a person all through their court proceedings. This means they still have to represent themselves if they cannot afford professional counsel.
Although there are figures for the number of vouchers handed out [7,246 in the first year], the scheme does not track the outcome – whether these people were able to keep their homes – and so the qualitative results are not clear.
Letters from the Taoiseach
The next two cases before the Master yesterday also involved lay litigants – Peter Harris, who is appealing a possession order secured by Governor and Company of the Bank of Ireland, and Karl O’Doherty, who is fighting a possession order on his family home which was mortgaged with KBC Bank Ireland.
The last time they were before Honohan, he advised them to write to Taoiseach Leo Varadkar to ask how they could apply for the Mortgage-to-Rent scheme. Both men were in court today with replies they had received from Varadkar’s office.
As he read from the letter sent to Harris, the Master noted that the Mortgage-to-Rent scheme “now has an acronym”, as it was referred to as ‘MTR’ throughout.
“That’s promising,” he said.
“He [the Taoiseach] refers to key changes that may be of relevance to you. The first one is that lenders are now required to formally communicate with you about why you are not suitable for the scheme,” the Master said, laughing. He was joined in his laughter by the solicitors, barristers and lay litigants in the room.
Honohan then joked that the banks could “communicate by pigeon, email, or whatever”.
Karl O’Doherty, whose case TheJournal.ie covered last month, handed a similar letter from the Taoiseach up to the Master.
The barrister appearing for KBC Bank Ireland told Honohan that, back in 2014/15, the bank had written to the man seeking consent to share his information with the housing authority but the form was never returned.
The High Court Master spoke of the complexity of these cases for ordinary people who end up in arrears, and of the limited availability of legal aid.
“I’d ask anybody to look at this bundle,” he said, holding up a large binder full of documents relating to O’Doherty’s case.
“This is the bundle a householder has to digest for the purpose of fighting their case and the bundle the judge has to read before they can decide whether it can be dealt with summarily.”
In his own letter to Leo Vardkar, O’Doherty had written that the “citizens of this nation are crying out for help and to be treated more humanely”.
The response from the Taoiseach’s office said that the government is “acutely aware of the serious distress caused by mortgage arrears and is committed to assisting borrowers” to access solutions, where possible.
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