HOUSE REPOSSESSIONS should be legally prohibited in all but the most clearcut cases, an Oireachtas committee has heard.
Repossessions should not take place without an independent analysis of the homeowner’s capacity to repay, an examination of the “quality” of the mortgage and consideration of alternatives, the Joint Committee on Finance and the Public Service was told.
Many new mortgage-holders who are in difficulty should not face orders for repossession on the basis that they should never have been approved the amount of money they borrowed, the Prevention of Family Home Repossessions group told the committee.
The group’s spokesman, Barry O’Flynn, said the repossession of family homes was creating tremendous social, psychological and economic pressures for borrowers.
It was imperative that alternative measures be introduced to minimise the number of repossessions and prevent the “socio-economic catastrophe” that would otherwise occur.
Another member of the Sligo-based group, Ignatius Beglane, said the problem was causing frightening levels of stress. In the UK during the 1990s, two out of every three couples who lost their homes ended up parting company, and the same could happen here.
“There’s hope when you lose your job, but there’s no hope when your home is gone.” He said there was overwhelming evidence that growing levels of debt led more people to consider suicide.
Mr O’Flynn pointed out that more than 70 per cent of repossession cases before the High Court were from financial institutions not covered by the Irish Banking Federation protocol. One subprime lender, Start Mortgages, accounted for five of the 22 applications to the court last Monday and had a further 20 cases adjourned.
Fianna Fáil TD Frank Fahey said most banks had acted responsibly, but Start was “off the map” and should be put out of business.
Another Fianna Fáil TD, Michael McGrath, said the real problem lay with subprime lenders such as Start.
One of his constituents started receiving aggressive calls at night and at weekends after going just one month in arrears with his mortgage, he said. A spokesman for Start told The Irish Times the company did not have a repossessions issue.
In total, it had repossessed 55 houses from a total of 11,000 mortgages issued and typically this happened where the owner “won’t pay” rather than being unable to pay.
The Irish Property Owners’ Association told the committee that many landlords would not be able to survive next year as a result of increased taxes, charges and the reduction in mortgage interest relief.