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# Abhaile
Over 4,000 borrowers flock to voucher scheme in bid to save their homes
Figures released to 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 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.”


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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