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Thursday 9 February 2023 Dublin: 2°C
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Column Families are being failed by our mortgage system
With 60 people a day begging for help with their debts, we must take action now, writes David Hall of New Beginning.

I MET A LADY last week whose husband had taken his own life. A lovely lady with two children. Borrowed on a family home, went into arrears and remortgaged to clear the arrears on the previous mortgage. They were involved in the services industry. The system failed this couple, the regulator and the Central Bank failed them, the government failed them. This lady’s husband could not handle the financial pressure and took his own life a few months ago.

There are a lot of people from all backgrounds who are in difficulty. Professionals who are and were on large salaries. They were coaxed into investment products and had equity release on their homes. They include business people, solicitors, barristers, doctors.

Then there are the people who have lost their jobs, with a social welfare payments trying to feed a family and live.

There is significant pain being experienced by our fellow citizens. They do not need forgiveness; they need our help, and support, and political leadership.

This is a serious issue manifesting itself in mental health issues, relationship breakup and genuine hardship.

Minister Michael Noonan will spell out his plans to deal with rising mortgage debt problem at the end of the month. One radical plan – to allow people rent their homes after they have been repossessed – has already been leaked. But so far all his utterances raise more questions than answers.

This is an urgent problem as we here at New Beginning can see. By the time people come to us for free legal help, they are at their wits’ end.

The organisation was set up last November to help those arriving in court facing repossession orders with free assistance from barristers.  We started with a handful of concerned barristers, but we now have 70 barristers working for us on a pro bono basis and are being contacted by up to 60 people per day. These are people who have been issued with proceedings from their bank, those in arrears and those not yet in trouble but feel it’s only around the corner.

Sobering reminders

Being taken to court and be asked to stand in a room full of wigged barristers simply because you have lost your job and can’t keep up with your mortgage is not a solution. It is modern-day torture.

The latest figures from the Central Bank relating to mortgage arrears released on Monday – one in nine are now in difficulty – are a sobering reminder of the lending and borrowing frenzy that happened during the Celtic Tiger.

This government needs to wake up and protect the genuinely hurt citizens of this brilliant country.

We need new ideas, non-judicial solutions and a strategic response, not political sound bites. We need to adopt the Law Reform Commission proposals to change the bankruptcy and personal insolvency laws and the government needs to get the real experts on board.

To see the Minister for Social Protection Joan Burton at the weekend say that the banks should do more was quite incredible. What planet is she on? The government own the banks on our behalf. They should be picking up the phone and telling them what to do – not allowing them, once again, sleep walk us into another debt nightmare.

Burton and Noonan need to take the bull by the horns and lead.

There is an interdepartmental committee of “experts” appointed to come up with some solutions. Experts I doubt – some civil servants have presided over this mess, and now they are suddenly experts on how to resolve it.

There are real experts in this area who deal with real people with real problems. I’ve met them; the best type of people within great organisations who want to and are helping people in this area daily.

Ministers: You have a wealth of experience, expertise, passion to help and resolve this mess. Call upon them. They are brilliant people; I’ve had the pleasure of working with them.

It is in all of our interests for our economy to be back on track. Ireland is a great country, a great people with a history of assisting each other.

We are all part of this society and this economy. No one is advocating that anyone be let off the hook, but we should be trying to develop, examine and propose solutions – not letting the banks, once again, take charge.

David Hall works with New Beginning, a group of lawyers, businesspeople and citizens set up to defend citizens facing home repossession. This article first appeared in The Guardian‘s Ireland Business Blog.

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