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Irish Losing Their Homes...

25,000 families now face losing their homes


FEAR: No more breathing space on mortgages...


UP TO 25,000 home owners face the chilling prospect of having their homes repossessed because they have fallen significantly behind on mortgage repayments.

Irish Life & Permanent (IL&P), which has a 25pc share of the home mortgage market, has confirmed that 6,122 loans are now three months or more in arrears and it is estimated that up to another 20,000 mortgage holders with other lending institutions are in a similar position.

Under the State bailout arrangement, banks had agreed to give all mortgage customers one year's breathing space before repossessing.

But, for many, that deadline is now imminent.

New legal orders coming in to effect on October 1 will make it easier for District Courts to grant uncontested repossessions, which is likely to increase the number of homes being taken over by banks.

Under the same act, contested repossession cases will be heard in the Circuit Court rather than the High Court, making the process cheaper and more attractive to the banks.

Labour Party deputy leader Joan Burton has called on the Government to ensure that homeowners who have run into arrears with their lending agencies are not "put out on the side of the road".

"There is no sense in repossessing in the short term because the families will be forced to go back to the State for help," she added.

The Labour Party had wanted the Government to bring in a two-year breathing space when the bank guarantee legislation was brought in, but this was rejected by Finance Minister Brian Lenihan as unnecessary. IL&P, which is covered by the €400bn State guarantee, said it would "work with" homeowners to try to manage their arrears.

A spokeswoman said the 6,122 customers who are in arrears are from across the range of mortgage customers.

"Permanent TSB is working constructively with all customers who may have problems with arrears to find suitable arrangements going forward -- irrespective of any clock."

TUMBLE

IL&P has suffered a €51m loss in the first half of the year with both loan losses from its mortgage-focused banking arm and a tumble in the life and pensions sales.

The company, which turned in a €300m profit for the same six months last year, had to set aside €189m this year to cover bad loans compared with just €15m for the first six months of 2008.

Chief executive Kevin Murphy said mortgage arrears rose rapidly during the last quarter of 2008 and the first quarter of this year but in the second quarter they began to slow down, reflecting the slow down in unemployment. Despite the losses, Mr Murphy said IL&P would not be selling off toxic assets to NAMA.

"We avoided the pitfalls of development and construction finance and we will not be a participant in NAMA," he said.

"Our lending focus has always been on mortgages for home owners and while we're seeing arrears on those mortgages rising as unemployment has risen, we are working closely with those affected to help them deal with their problems."


Report by Clodagh Sheehy - Evening Herald

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