The Irish Mortgage Holder’s Organisation has called on people who aren’t being offered a sustainable debt solution to stop paying their mortgage and remain in their homes.
The ‘No Surrender’ policy was announced by IMHO chairman David Hall at a conference on mortgage arrears at Griffith College Dublin yesterday.
Estimates by the IMHO of the number of people currently facing such a stand-off with their banks run to 10,000.
Hall said that the policy is designed to help “those who are being bullied by banks to hand back their homes”, many of whom are being forced into what he described as “silent repossessions”.
The IMHO acknowledged that those following this advice will be open to a “legal process of repossession”, and promised to offer all advice and guidance that it could in relation to that process.
“There will be phone calls and harassment,” he warned.
He also warned, however, that borrowers could be facing legal action on residual debt even if they hand back their house, especially if the debt is sold on to a third party.
“Handing back the house and possibly facing more aggressive legal action on the debt could be more stressful.”
Hall alleged that many lenders are offering incentives for borrowers to leave their homes, such as payments of furniture removal costs.
However, if the borrower leaves and the bank takes repossession of the house, there is often no deal on the residual debt offered.
Hall said: “Where a bank will not come to an agreement on the residual debt the borrower should stay in the property and not surrender it. There is no benefit to the borrower surrendering the property.”
There has been no forward guidance on the policy issued to lenders, Hall said, adding that some banks had upped the stakes themselves by outlining a veto policy on debt write-downs in front of the finance committee earlier this year.
He said that in the context of some of the solutions being offered by banks at the moment, borrowers “may be better off bankrupting themselves in their own time”.