Sunday, 23 May 2010

Struggling Homeowners...

Struggling homeowners turn to SVP...

Under-pressure homeowners are using every last cent to pay their mortgage bills, leaving them so short of cash they are turning to the Society of St Vincent de Paul for extra money to buy food and pay utility bills.

In the capital, St Vincent de Paul volunteers dealt with a massive 10,000 calls in the first four months of this year -- up 30 per cent on 2009.

Now they fear there will be a further raft of people in trouble with their mortgages when redundancy payments given to people who lost their jobs last year run out.

According to ratings agency Moody's, the number of Irish people who have fallen behind in their mortgage repayments has come close to doubling in the last 12 months.

The rate of delinquency in mortgage repayments -- those with more than 90 days of mortgage arrears -- rose to 3.8 per cent in March up from 2.1 per cent during the same month last year.

According to John Monaghan of the St Vincent de Paul Society, more and more people are seeking help because they are struggling to keep their home.

"They are using all their available money to meet their monthly mortgage bill, which means they cannot afford the basics like food and fuel.

"This is a country-wide phenomenon. Our conferences are helping people with food, with keeping children in school with books and uniforms," Mr Monaghan said.

"We have seen a 30 per cent increase in people coming to us overall. The two most frequent requests we are getting are people seeking help to buy food and to keep the lights on and the house warm."

He said that when this happened, the Society sat down with the householders and talked to them about getting in contact with their lenders and the Money Advice and Budgeting Service (Mabs).

"We are finding that when they get in these dire straits, people panic and don't think about going to the lender. We say to them: 'Look we are with you, we are not going to abandon you. We cannot help you pay your mortgage but we will look after the other bits and pieces. What you have to do is to take control of this process and contact the lenders and try to come up with some kind of deal'," he said.

He added that the main financial institutions who were part of the moratorium on house repossessions had been generally amenable to negotiation.

He noted that there had been a recommendation from the Law Reform Commission that other institutions like sub-prime lenders and Credit Unions be included in the moratorium initiative and he supported this call. "What St Vincent de Paul is trying to do for these people is to keep life ticking over as normally as possible."

He said the Society thought there would be more people seeking assistance, but redundancy payments and a moratorium on repossessions had helped families get by.

"However, we believe there will be an increase in the number of people in trouble.

"One of the things that we are concerned about is that many people are on Job Seeker's Benefit. That lasts for nine months to a year and as soon as that goes, they will find that whatever they get from the dole will be means-tested.

"That is when people start coming to us, when they are struggling to get a social welfare payment and their income drops drastically and they cannot afford to keep things going on the home front," Mr Monaghan said.

Meanwhile, Senator Marc MacSharry and other members of the Prevention of Family Home Repossessions Group last week presented new proposals to the Expert Group on Mortgage Arrears and Personal Debt, which was set up by Finance Minister Brian Lenihan.

Report by JEROME REILLY - Sunday Independent

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