Should better support be provided for those in mortgage arrears?

Should better support be provided for those in mortgage arrears?

Should better support be provided for those with mortgage arrears?This week leading Housing Association, Respond! reported that nearly 100,000 homeowners are struggling with mortgage repayments, with more than 40,000 homeowners in arrears of 90 days or more and a further 28,000 who have been unable to repay their mortgage for more than 180 days.

Respond! fears that housing repossessions will soar this year unless urgent Government action is taken as anyone who has not paid their mortgage for a year or more is no longer protected by the Central Bank code of conduct on mortgage arrears. This leaves them highly vulnerable to having home repossessed – however banks have so far been reluctant to take this drastic action.

With these figures and with election campaigns in full swing, Fine Gael pledged to ease the burden on hard-pressed homeowners by expanding the means-tested mortgage interest supplement (MIS) scheme and by providing increased mortgage interest relief for those they called the “negative equity generation”.

Many punters were angry on hearing the announcement saying that the cost of any support will be borne by those who avoided excessive borrowing and who are already financially stretched themselves. Not only that, but some believe by increasing reliefs it could incentivise homeowners to breach their financial obligations as such plans would amount to “free money”.

Have Your Say:

  • Should better support be provided for those in mortgage arrears?
There are 43 comments for this article
  1. niajas at 2:09 pm

    paid 195000 in 2006 for a house thats worth 80k now im 55miles away from my job cummuting costs 100euro per week.fair enough but the only problem i have is in an estate of around 70 houses id say 3 houses actully pay a morgage i being 1 i live next door to travellers who pay nothing when i bought i didnt expect to be living in a halting site with horses roaming the green area.this countrys a joke and in most cases our government is to generous to people who never bothered

  2. Georgie at 10:48 am

    Naoimh, while I am sorry that many in your position feel anxious and depressed, the fact is that you are merely in negative equity; it’s not like you have lost or are in danger of losing your home. It is a very tough break for you and whether or not you want it, you have my sympathy but that’s all! If you want help, ask a charity. “Some people have no idea”? I couldn’t have put it better myself!

  3. Daniel at 10:12 am

    No, we should not. No one pays my rent arrears. Buying house is always risky, If someone believe they can afford to borrow half a million euro for 2 bed apartment it’s their mistake. If I invested half a million in shares of company that goes busted few years later, how can I expect anyone else to pay it for me? If that house was worth a million now, would he sell it and share profit with others? No, no he wouldn’t…

  4. Naoimh at 3:46 pm

    I cannot believe some peoples comments. Until you are in negative equity and are experience the anxiousness and depression of being trapped. How could you ever know what its like? Is it those who have negative equity’s fault that they went along with the economy of the time thinking this is what was right to pay for a house. Come on!!! We are not asking for sympathy just help with the situation. some people have no idea!!!

  5. Clare at 5:56 pm

    To comment number 13 by Rebecca
    “Bringing rent into this is puerile. If you can’t pay your rent, you move to cheaper accommodation or the landlord throws you out with a deposit.”
    Here’s a solution for you Rebecca. Sell your house. Grow up and deal with the fact that you’ve lost money on on a ridiculously stupid purchase. Pay back what you still owe and go rent a cheap room in a shared house – like the rest of us (who weren’t stupid and greedy enough to take whatever the banks were offering us) have done for the past 10 years. Deal with your debt and I’ll deal with mine.

  6. Paddy at 5:43 pm

    Absolutely Not. I am not working like a dog to pay someone elses mortgage. My brothers and sisters are in trouble now because they have massive mortgages and no jobs/money and some now live on the dole. Well let me tell you, when times were grand those same people used to make me and my wife feel like losers because we could not and would not take out a mortgage we knew we couldn’t afford. We were offered a mortgage when we applied for one under pressure once but I thank God everyday we decided against it. Every Christmas we used to hear how we HAD to get a home NOW or we would be priced out of the market. Over and Over. Well this last Christmas I just sat back and smiled because all those people that made us feel like losers are now the losers. I may little money but at least I don’t have the stress. My family were fancy and greedy and yet what are they now? Learn your lesson from this. Don’t try to live like kings on a paupers purse. I will not bail you out. Tough luck.

  7. claire at 11:04 am

    No way. Why should I have to supplement those who went OTT on their houses. I ran up credit card debt, that’s my problem & I need to sort it out. Same applies for people who ran up excessive mortgage costs.
    Grow up and sort out your own problems.

  8. david at 7:37 pm

    no if you took out a big mortgage they should pay back every cent and that goes for everyone

  9. Kabob Dylan at 7:13 pm

    Those who bought houses at inflated prices must carry the cost of their own mistakes. I did not buy a house because I knew I could not afford the repayments if interest rates increased. Why should I as a tax payer now be required to pay for the mistakes of others. If I am required to pay for other peoples houses I would expect the State to take ownership of those houses on my behalf and reposses them where the the owners do not maintain a certain minimum level of repayments. Those who bought did so of their own free will in the full knowledge that they would have to make monthly repayments or lose their homes.

  10. yvonne at 6:59 pm

    Hi Gerry in Limerick,it may sound like an obvious move but in the event that you have not done it is sometimes possible to deal with your bank to have your mortgage renegotiated. I have heard of MABs being in a position to help in situations such as yours. Unfortunately you will need to contact MABs directly as they will not accept third party requests for help. I hope this helps you in some way but you might also consider contacting your local T.D. if you have continued difficulty.

  11. Peter at 6:51 pm

    No. I think anyone having difficulty should think about selling. Cut your loses and rent. I know the rents are slightly higher at the moment but the more houses that come on the market the lower the rents will go. Let’s face it… none of us in negative equity are going to ever make any money on the house we bought. Most of us have already lost the savings we put in as deposits. If you can’t pay, sell! That’s what we’re going to do.

  12. ROA at 5:35 pm

    Yeah why not!!!, if they “Government” could plug paid taxes into Anglo then the government should be able to plug some of my paid taxes to offset some of my negative equity.

  13. ROA at 5:32 pm

    Yeah why not, if they could my plug tax paid in anglo then the government should be able to plug my paid take to offset some of my negative equity

  14. Patrick Rooney at 4:07 pm

    We go no help when our morgage went from 12.5% to 17% many moons ago. They are not childern the took out the morgages, people should be responsible for there own decisions and quit blaming everybody else, nobody put a gun to ther heads to take out the big morgages.

  15. paul McCloskey at 3:01 pm

    sorry but we are all going to have to bail out the neagtive equity generation because if we dont the civil unrest we have seen up until now will be nothing compared to when you have thousands kicked out on to the streets by the banks for not paying their mortgage
    the in coming goverment knows this only to well

  16. Paddy at 2:55 pm

    Young couples are in trouble because they bought houses at inflated prices and lost their jobs – in that sequence. The Government, Banks and Developers caused this situation and should pay for it – not the unfortunate young couples who are struggling to survive. They just bought a house to make a home not to make a profit.
    The suggestion that those who bought houses (for homes)between 2004 and 2008 should be helped by the Government is a good one.

  17. Chris at 2:07 pm

    In order to get some movement back in the property market their should be some debt relief.This is happening already on the commercial property where a bank is exiting the Irish market.The banks have already made provisions in their accounts for up to 50% write downs so why should some of this not be shared with home owners.
    The land had to rezoned before the builders, banks and you and I got involved.The politicians who our now retiring on the big money got us into this mess, why should they be rewarded with golden hand shakes and index linked pensions??

  18. Bonnie at 2:03 pm

    In normal circumstances house prices naturally follow the inflation rate. If you follow that trend and look back to 1996, about the time when inflation and house prices matched, and estimated how much over inflated the house prices are you would see that the value of the Irish house needs to drop (I estimate) to about 60 -70% from the peak home value in 2007 to come back to the match the inflation rate rise over time.

    What happened? Well it looks like our Government’s use of low corporation tax used to increase jobs in Ireland, a good idea at the time, had a catastrophic affect on the country as it was seen as the place to invest. The typical scenario followed; industry came to Ireland, property was bought up quickly as more industry and a global workforce descended on Eire, property prices rose. The wages didn’t rise accordingly and the tax that the government so desperately needed was instead levied against the citizens of Ireland.

    What I want to know from the government is:
    1. Why weren’t measures put in place to stop the over inflation of property prices?
    2. Why did the government not put a stop to the irresponsible lending of banks?
    3. Why did the government not at least start to increase corporation tax and decrease personal tax once the business had started to come to Ireland?

    Asking these questions I believe the Government and banks need to take responsibility for their actions. The banks knowingly lent the money in an over inflated market. The Government did nothing to stop the obvious and foreseeable crisis.

    To ask people to leave their homes or try to keep up their current mortgage repayments is morally wrong under the current economic crisis. I think instead of giving money to the banks it would have been more practical for the government to take over the bad mortgage debt and to put it to zero interest and extend the period to allow people to repay. We now have the bizarre position where we have a loan to Europe at an interest rate above the value that anyone would get from a bank, a dwindling tax base as people are unemployed and a low corporation tax in the vain hopes of encouraging more industry to come and those that are here to stay.

  19. Marie at 2:02 pm

    I bought a house in the so call Boom!!! A modest 3 bed, first time buyers house which is now in negative equity. I have no other loans outstanding. so there was no overspending. My husband was self employed but is now unemployed, we receive no social welfare payments because we don’t qualify. What sickens me is if I can’t afford to pay my mortgage I could rent it out to someone on social welfare. So the government can pay for someone else to live in my house but not aid me??

  20. Foresight at 1:54 pm

    I feel sorry for people who find that things are tough with their mortgages and I genuinely wish you all the best, however, life takes many turns for some they are really tough for others they’re easier. When times were good some of the people who are now finding it tough had little or no regard for the fact of what they were paying for 1 home or numerous be they holiday or investment, when people like me said the price was too high I heard comments like, “you’re a socialist” or “that’s just the price things are now”, which I completely didn’t agree with them.
    Now I find I don’t have a house and unfortunately for you home owners I was right, so in the same vein, I didn’t buy so why should I pay. Foresight and intuition we all have and I hope people reconnect and start to use this when rebuilding our country and it’s reputation.

  21. andrew peat at 1:25 pm

    yes something decisive has to be done, we ve all ended up been mortgage slaves. what really bugs me is the banks increase on variable interest rises, i ve personally experienced four increases since the e.c.b fixed their rate at 1%, which was to faciliate the burden of interest on home owners. banks seem to be able to do whatever they want. i bank with tsb and am now paying 250. euro extra on interest alone each month, i m paying for losses the bank encountered from poor investments that they made with lehmans and icelandic banks. im at breaking point. banks beware people aint goin to take much more of the crap you ve been forcing us to endure,

  22. Maura Phillips at 1:22 pm

    No. We can’t afford to help people with their
    m arrears!! I am just about managing with the cuts
    as it is!!! Maybe if the gov. / Garda get the money
    back from fitzpatrick and the rest! And if the
    people of Ireland went out on the streets and over
    turned this gov and fight for their rights .
    Until then no no no.
    U can’t expect people to feel sorry for u if u
    don’t get off the couch and do something for
    yourself

  23. John O’Connell at 1:19 pm

    No way! Your house your decision, your mistake, why I need to pay for it, I pay already in taxes. You expend more than you can afford, sorry your fault.

  24. terence O’Connor at 1:12 pm

    The expectation is that I am now expected to assist these speculators, and snobs, who went after Large homes way beyond their family’s needs, from a Pension that I worked hard and sore for. Living within my own family’s needs.Why should I now be Penalised because of their lack of foresight. We all NEW that the Bubble was going to Burst but they proceeded regardless of the warning signs.

  25. Niall at 1:11 pm

    Banks should help those who have lost their jobs,and are now not in a position to maintain full repayments if some people are making a effort to repay some amount no matter how small, then they should be helped. however those in work should not be helped just because their house value has dropped,and if they are in full employment and are not making any repayments, then these people should not be helped….

  26. terence O’Connor at 1:06 pm

    No. Definately not. Many of these people were no different from the Banbers. They were Greedy and speculated at that time. An acquaintance upgraded from Three Beds to Five Bedroomed house for Status sake and said when they moved again they would make “a fortune” on resale value. I had to pay my mortgage in full when I was living on a very small wage. No help then, and no one was interested in my plight.

  27. Ja at 1:02 pm

    Nobody in this country was forced into house purchase with a gun pointed to their heads. Everyone made a decision and if some people are suffering now then its because they chose incorrectly. I have been looking for a house since 2006, but could not accept the values that people were placing on properties. Estate agents were hugely at fault, but won’t accept any responsibility, but in the end, the people who went off and got huge mortgages have to shoulder blame as well. I was mocked for paying “dead money” for years, but now, when my decision has been vindicated, I don’t see why we should be helping people, who if prices had continued to sky rocket, wouldn’t be rushing to offer handouts to others. Totally agree with Angry at post #02.

  28. J at 1:01 pm

    Yes.
    In answer to this question I am anticipating alot of ignorant replies i.e ‘why should I pay for other peoples stupidity’. I as a single woman, bought a one bedroom apartment in 2005 (moving out of my parents home). I kept up with all payments as I made sure that in the event of money issues I could still afford my mortgage. However in the last year I have been put onto a 3 day week, lost most of my commission in wages and most of the cost of living has gone up. My property is now in negative equity and I could not sell it even if I wanted, I have had to move home to my parents home and rent the property out in order to not go into arrears. I feel I have been extremely responsible and I purchased my little apartment as I was at the age where moving out of my parents was right. My actions where not stupid and if there is help offered I would gladly accept it.

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  30. Anon at 12:50 pm

    No way! Nobody forced people to take out huge mortgages. Why should those who were prudent be punished? It’s time people took responsibility for their own actions – everyone from home buyers to bankers!

  31. Frank Carolan at 12:38 pm

    Its the banks and the Bond Holders who are at fault here.

    If i go to play the Lotto tonight and i spend €20 on tickets, and i dont win, should i be allowed to go into the shop and demand my money back??

    No, so why should the bond holders, who took a chance and lost, be allowed to demand their money back and not feel the pain?

    I think it is criminal for the banks, especially TSB to be allowed to raise their mortgage rates for any customer by 3%. That is just wrong.

    You can be guaranteed that the managers in the banks are not facing those kind of rates, and i am sure they are looking after number one.

    The banks, not all, are under our control now, therefore we should have the say on when, and if, they raise their rates.

    As we all know, there is an election on Feb 25th. Vote with your ballot cards people, change the country for good.

    Ideally we should be on the streets like the Egyptians who are standing up for their rights, i know that its a dictatorship but at least they are taking action unlike the Europeans.

    The point i am making here is, the normal people of ireland didnt take the risk, they only invested in property for the future, as a home, as an investment, but why should we bear the brunt for the incompetence of the Bond Holders whose bet failed.

    Let the bond holders bear this loss.

  32. Rebecca at 12:36 pm

    “Nope. Who’s gonna pay my rent arrears?” Bringing rent into this is puerile. If you can’t pay your rent, you move to cheaper accommodation or the landlord throws you out with a deposit. If you’re on social welfare, a bulk of it is paid (and don’t we know of so many manipulating that particular “elephant in the room”) If you can’t pay your mortgage, you can’t jump around to the next house around the corner. You’re still strapped with a whopping big mortgage for life, house or no house. Nevermind the massive stamp duty people were paying, solicitors fees, estate agents fees, hidden charges, etc, etc people paid and the amount of money they’ve already pumping into paying their mortgages.

  33. Rosie at 12:33 pm

    yes I am in arrears did all the right things have to give up work due to ill health in arrears with nearly everything. Eircom would not accept a payment of 10e per week said iits too low to clear bill, what am I to do sick with worry was sole provider educated my children to degree level, they have no work, one waiting for his papers to leave the country. Fed up

  34. Moral Hazard at 12:31 pm

    totally agree with comment no.1 from ‘Clare’. We all make CHOICES… it’s time people to face up and deal with them. Stop expecting other prudent people to bail you out. i was kept out of the home market for years by rising prices due to greedy people taking a punt, and now the chickens are coming home to roost. they say every dog has his day…well hopefully mine is coming soon when i can finally buy a home at a reasonable price… even if it was repossessed!

  35. Paddy Poor at 12:29 pm

    Yes, of course the tax payer should support my debt repayment. I just managed to buy my house in 2007 at tail end of the peak; lots of people were telling me the price was crazy but the estate agent said “I was lucky get such a great deal and Bank of Scotland are decent enough to give you a 110% mortgage” which covered the new 4×4 for herself and a couple of weeks on the Costa del Sol.

    Also what can the tax payer do to help me pay off the two bargain investment properties myself and the brother-in-law bought in Outer Mongolia, we can’t find any tenants who will pay cash, so far the only offer we received had is some goats and an ugly old woman who will be sent to work in our house in Ireland in return for board and lodgings.

  36. Alec at 12:26 pm

    Sorry but this should NOT happen. As once again people are getting away with making their own bad decisions. I could have bought in the Celtic tiger but I CHOOSE not to as it was not value for money and I knew it could not keep going the way it was well otherwise i was buying a one way plane ticket as it wasnt reality and if people where that stupid to fall into the CON by developers and banks then sorry but sod off thats their problem. I have bought in the last 6 months in recession times and i am barely scrapping threw. So anything more me and most of the country will be in arrears as it will get to the stage by supposedly helping the people that made BAD choices of their own accord they are once again shafting every1 else.
    But what hope do we have when you look at the politicians / lieing / cheating / hipocritical / thieving SCUM ( you can make your own choice. ) who will be making the decision?? Its the politicians and developers that should be locked up and not the common person who is being locked for not paying a tv license or such. But where are the scum that got us into this mess but sunning it up in america and such places. And they should have to cover it and maybe get some trust back from the Irish people. But I doubt that will happen because The Irish people are being treated like 2nd class citizens in our own country now-a-days.
    Kinda wishing I bought that one way plane ticket rather than the house and taken my saving abroad!!!
    The level of cop-on and common decency in Dublin and the Government or all politicians is ZERO!!
    Thats me done before I say something I shouldnt.

  37. Carol Buckley at 12:25 pm

    People in arrears should be helped but NOT at the expense of those of us who haven’t even bought a home yet. If Mortgage Interest Relief is removed completely for first time buyers, how are we to get into home owning in the first place? House prices may be cheaper but monthly repayments are the same because of the interest rates.
    Also I lost my deposit (€20000) when a developer went bust and haven’t gotten it back and never will. Nobody out there is interested in helping me. How is it fair that I can get stung by a developer and there’s no one offering something for me?

  38. Vivien Hick at 12:25 pm

    People in trouble with their mortgage repayments could be assisted on an individual basis. Perhaps the terms of their mortgage could be changed or extended or that the state could buy part of their homes. If they loose all they will then need to look to the state to provide rental accommodation which will end up costing the tax-payer money also not considering the social and emotional aspect.
    For most of our lives house purchase was looked on as a safe investment and house prices always rose – none of us foresaw what would happen to the banks.

  39. Colm at 12:25 pm

    We need to completely reset the system. Assuming that a bank default is now inevitable (the debt is too great for the taxpayer to take on) then we should remember that much of this bad bank debt is linked to a customer debt on the other side of the page. So we default on bank debit column and reduce it to say 30c on the Euro. At the same time the mortgates and loans that sit on the asset column and should likewise be reduced to 30c on the Euro. Thus we are removing the impact of the bubble from the economy.

    Those who claim they didn’t take on a mortgage should remember that they now sit in a position to benefit hugely from the current situation. The housing market is so depressed that they can pick up a home in a distressed sale at an artifically low price. This is just as socially wrong as the person next door stuck with an artificially high mortgage just because they are 4-5 years older than their new neighbour (and often it comes down to age as that often determines the stage of life you are at). Resetting the whole market to a reasonable level may well see them pay slightly more for the same house but they won’t be doing so at the expense of their overburdened neighbours.

  40. Anon at 12:23 pm

    Hi There

    I bought a house in 2006 for 535,000. if i were to sell it today i wouldnt even get 300,000. I pay more than my fair share of tax and all that hard earned money is sacrificed to help banks ive nearly had any dealings with. What about me??? Why shouldnt i get some tax relief or some assistance from the goverment. after all, with out people like me, who make a positive contribution to the exchequer AND national debt, this country would be incapable of recovery. I am nearly a quarter of a million in negative equity, i have a mortgage of 465,000 on a property worth less than 300,000.

  41. Gerry O Brien at 12:15 pm

    I had to take out a mortgage 3 years ago to have my home adapted to my disabled needs. The grant did not cover all of this. Now after 3 budgets later and cuts in invalidity pension I am in 4 months arrears and I am so worried about it I cannot sleep. I have MS and cannot work again but the government felt the need to cut invalidity pension when we cannot work anymore. I applies for mortgage relief but I dont qualify. I have been to St Vincent de paul but no help there either. They say they dont have money. My Gas and ESB are also in arrears. If you can put me in right direction for help please do so.
    Gerry Limerick

  42. Angry at 12:10 pm

    The banks need to bear the brunt of mortgage defaults – they were the ones giving ludicrous amounts of money to people. Why should I have to pay for being cautious about what I borrowed when times were good, I didnt buy to let or buy holiday homes, I didnt even buy a principle property as I could see that prices were getting way above where they should be – so why should I suffer. If I’m forced to pay more tax, I will be emigrating.

  43. Clare at 12:08 pm

    Nope. Who’s gonna pay my rent arrears?

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