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Strangled By Mortgage Noose...

Being strangled by the monthly mortgage noose...


OVER the past number of weeks and months, we have become used to speaking in billions.

Seven billion to recapitalise AIB and Bank of Ireland; a €22bn cash injection into Anglo Irish Bank; €81bn worth of developer loans transferred to NAMA -- the list and amounts of money appear to be endless.

But for many, the only real amount that matters is the one they need to pay each month to keep a roof over their head.

Unfortunately, for tens of thousands of Irish families, this amount is far greater than their income and the mortgage rope around their neck simply gets tighter and tighter each month.

According to the Financial Regulator, more than 28,000 homeowners have not been able to repay their mortgage for more than three months. Another 30,000 have been forced to renegotiate their mortgages.

I suspect this figure of almost 60,000 is merely the tip of the iceberg and will only increase.

Considering that more than 230,000 people have been made unemployed in the past two years, the likelihood is that tens of thousands more homeowners are struggling to repay the mortgage at the expense of food, electricity, clothing and other basic necessities.

Many families are struggling to breathe and there is little light at the end of the tunnel.

We have already seen all of the major banking institutions increase interest rates in the past month and most have indicated that this will be the first of many such rises this year.

Most of these increases occurred as large developer loans were being transferred to NAMA. Many suspect that banks will now return to the business of banking -- that means more interest rate increases and more aggressive management of bad debts.

Under the Statutory Code of Conduct on Mortgage Arrears, banks cannot seek to repossess a property for 12 months after the first repayment is missed.

For many, however, that simply delays the inevitable as arrears, interest, penalties and bills accumulate with little prospect of ever being repaid. After that year has passed, there is no protection for homeowners and the gloves are off.

LAST year alone, the number of repossession orders granted by the High Court increased by 66pc. Worryingly, the majority of cases date back to 2007 and 2008 when the effects of this recession had not even hit.

A lot has changed since then. Rising interest rates, mounting arrears and negative equity mean that for many homeowners there simply is no way out.

So what assistance if any is available to those fighting to keep their home? Limited state assistance is available in the form of the Mortgage Interest Supplement -- a short-term support to help you pay the interest portion of your mortgage.

More and more people are availing of this supplement and the cost of it to the State increased five times in just two years to €60m in 2009.

However, for every homeowner accessing the supplement, another is being refused.

The Department of Social and Family Affairs is currently reviewing the scheme but it is now more important than ever that the supplement is made available to those in difficulty.

The Government has realised that urgent action needs to be taken to assist homeowners. An expert group is to return to the Government in June with a detailed set of proposals. But the fear is that for many families this will simply be too late.

We are all discussing the financial cost of helping people in mortgage trouble but little discussion has taken place with regard to the cost to society.

In time, we will see the real effects on people's physical and mental health and on family relationships. Anecdotally, we hear of more people suffering depression, higher numbers at risk of suicide and increased rates of marital breakdown.

There will be a cost to helping families and homeowners in difficulty -- but the longer-term cost of failing to act may be much greater.


Report by Aoife Walsh - Irish Independent.

Aoife Walsh is national communications officer with the voluntary housing organisation Respond.

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