Report recommends forum of state bodies to tackle mortgage arrears issue
A new Government commissioned report has called for the establishment of a forum of senior representatives from departments and bodies to focus on further reducing mortgage arrears.
The forum should meet twice a year to oversee the implementation of the Mortgage Arrears Review Group’s recommendations and to recommend any necessary measures needed to tackle the problem.
The report also recommends that a coordinated communications strategy targeted at defined groups of mortgage holders who are in arrears be established.
The study says the strategy should outline the various options that those in mortgage arrears can avail of to help address their situation and the free supports that exist.
The review group also finds the process around the legal repossession of properties with mortgage arrears continues to present significant challenges.
It says its notable in Central Bank data that only around half of mortgage accounts in long-term arrears that are not restructured and classified as “not cooperating” are subject to legal proceedings.
The group says data collection needs to be improved across the financial and legal systems, and a further survey of lenders’ experience with the legal process needs to be carried out to take account of their perspective.
It recommends that periodic briefings be given to the Judicial Council on the further development of the Code of Conduct on Mortgage Arrears by the Central Bank of Ireland and related mortgage arrears procedures and solutions.
The analysis also suggests that mortgage holders whose arrears continue for more than five years should continue to be prioritised within the Abhaile service, which provides free support to borrowers in arrears.
The group also proposes that the professional development of Personal Insolvency Practitioners (PIPs) in the area of mortgage distress arising from marital breakdown should be enhanced.
While there should also be co-ordinated interaction between dedicated mortgage arrears advisors at the Money Advice and Budgetary Service (MABS) and PIPs, the report says.
It also recommends that personal insolvency legislation be enhanced by way of appropriate amendments to take account of the specific recommendations of the review group.
On the Mortgage to Rent Scheme (MTRS), the report says it should be widely promoted in order to help meet the agreed targets under Housing for All.
It also recommends the monitoring of the performance and uptake of the MTRS scheme, including a high-level review to begin in early 2026.
The Mortgage Arrears Review Group was set up in October of last year by then Minister for Finance, Michael McGrath.
Its purpose was to review the operation of the mortgage arrears resolution framework and identify reforms or improvements that could be made to better address the issue of long-term arrears.
The move came amid the increase of interest rates from historically low to record high levels.
“I welcome the report of the Mortgage Arrears Review Group as a valuable assessment of the State’s response to resolving mortgage arrears,” said current Minister for Finance, Jack Chambers, who brought the report to cabinet today.
“The dramatic shift in the interest rate cycle since July 2022 has had an impact on many borrowers.”
“The report is a timely intervention and recommends appropriate reforms to assist mortgage borrowers who are experiencing distress.”
The group was made up of Government officials from a range of departments, including finance, social protection, justice, housing and from the Central Bank and other agencies.
In 2022, the International Monetary Fund recommended that the Government address the issue of mortgage arrears through a coordinated multi-agency strategy for resolving arrears.
At the end of March there were 28,769 principal dwelling house accounts in arrears of over 90 days, down slight on the figure at the end of last year.
While there were 20,258 accounts in long-term arrears, down 1,757 in annual terms.
“It is fortunate that Ireland has a robust consumer protection framework in place and I urge any borrowers in or facing arrears to engage with their lender in the first instance,” said Jack Chambers.
“Under the Abhaile service, the Money Advice and Budgeting Service as well as Personal Insolvency Practitioners can also arrange free expert and impartial advice to borrowers in mortgage arrears to help them find a solution that keeps them in their home.”
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