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Repossession Of Homes

Pressure on State to stop repossession of homes...


There is a "substantial" number of new mortgage holders who should never have been approved for the amount of money they borrowed and repossession orders should not be granted to their lenders, proposals to Finance Minister Brian Lenihan and the Oireachtas committee have urged.

A group, whose aim is finding a way to assist thousands of families who face the "very real threat" of losing their homes because of mortgage arrears, said the terms of loans should be amended to what the borrower can afford.

The Prevention of Family Home Repossession Group has made submissions to Mr Lenihan and the Joint Oireachtas Committee on Finance and Public Service on a variety of measures to deal with the problem.

They have also warned that many families will find themselves in a poverty trap with a deteriorating economy, spiralling unemployment and the prospect of interest rate rises.

"This has the potential to lead to catastrophic social difficulties throughout Ireland which would cost society and our nation dear," the group, which comprises Senator Marc MacSharry, businessman Ignatius Beglane, general manager of Sligo Credit Union Barry O'Flynn, accountant Cathal O'Donnell and solicitor Dermot McDermot, said.

They point out that over 20 per cent of households are already in arrears with an overdrawn bank account, credit card balance, mortgages, rent or arrears on other bills, with mortgage arrears being the most prevalent.

And they said although the European Central Bank indicated that key interest rates will remain unchanged well into 2010, it seemed certain that mortgage holders in Ireland will see an interest rate rise as banks and building societies seek to increase their margins to boost profits.

The group believes that the repossession of a family home due to mortgage arrears should not be allowed without a detailed independent analysis of repayment capacity, an examination of the quality of the mortgage application and consideration of a range of alternative actions.

They have recommended a range of options: Interest-only payments not exceeding four years; permanently extending the mortgage period without penalty; renting the property back from the lender, giving him an income from the house; giving mortgage holders breathing space to clear debts; fixed rates -- addressing a problem debt at a lower current rate, and redrafting mortgage terms to what the borrower can afford.

They stressed that an order for repossession should not be granted until the court is satisfied that the loan was properly granted and that analysis of the capacity of the borrower to repay had been carried out, and that there should be an independent analysis of the current position of the borrower to repay the debt.


Report by Don Lavery - Sunday Independent.

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