FLAC hits out at slow progress on mortgage arrears promises

There has been “bewilderingly little progress” in tackling the problem of mortgage arrears despite Irish government promises in May, according to Free Legal Advice Centres (FLAC).

New analysis by FLAC shows that measures aimed at increasing the support available for distressed borrowers have not been implemented in full.

Despite indications that Circuit Court judges would be granted the power to overrule a lender’s unreasonable refusal to a personal insolvency arrangement, changes made to personal insolvency legislation only affect those in arrears or in arrangements on 1 January 2015. Even for those, FLAC says the necessary court rules are not yet in place to allow for review by judges.

There has also been no visible change or improvement to the Mortgage to Rent scheme nor has a legal advice and representation scheme been set up for people seeking to negotiate mortgage debt solutions or for those facing repossession.

Noeline Blackwell, director general of FLAC, said: “FLAC’s review of progress in getting solutions that will keep people in their homes is that the government knew last May what they needed to do, but there has been bewilderingly little progress in putting these measures in place.”

She said FLAC believes there must be an independent, fair system of identifying what is a mortgage solution and people should get financial, legal and money advice to deal with lenders and the courts.

Ms Blackwell added: “The government statement of 13 May 2015 shows that it knows that focused and sustained action is needed immediately to put proper systems in place for people in debt so that their mortgage arrears do not lead to homelessness. The problem is implementation.

“For many of these over-indebted borrowers as well as for tenants who live in buy-to-let properties in arrears, the last 6 months since promises were made have seen almost no improvement in systems which would allow them to take control of their debt and to gain security in their homes.”