Kenny says mortgage crisis biggest issue facing Ireland

Mortgage arrears is the single biggest issue currently facing Irish people, Taoiseach Enda Kenny has said.

He told the Dáil today the Government had taken a number of steps to deal with the issue, such as establishing a specific Cabinet sub-committee.

Mr Kenny added that a great deal of work had been completed on the Personal Insolvency Bill to encourage banks to give borrowers a chance to work their way out of debt problems.

“I would like to think that the banks themselves would show greater urgency in sitting down with the borrowers,’’ he added.

Fianna Fáil leader Micheál Martin said the Government had failed abysmally to effectively deal with the mortgage crisis.

“There has been a clear lack of urgency, a lack of any commitment to radical action and, indeed, your whole behaviour and response to the mortgage arrears crisis has been one of chronic inactivity,’’ he added.

Mr Martin said there were now over 75,000 homeowners, or 10.5 per cent of the total, unable to pay their mortgage after 90 days.

The comparable figure in the UK was 2.5 per cent, he added.

Sinn Féin deputy leader Mary Lou McDonald claimed the Government was inactive on the issue, despite having promised a lot in Opposition and in the programme for government.

The Central Bank said yesterday it was “not comfortable” with the level of mortgage arrears and wants the banks to do more to tackle the worsening mortgage crisis.

The bank will meet the boards of AIB, Bank of Ireland and Permanent TSB over the next two months to ask them to “take a direct and personal interest” in making sure the banks follow their plans to resolve troubled mortgages.

Matthew Elderfield, the Central Bank’s deputy governor in charge of regulation, said yesterday the banks were unprepared for the crisis and had been “geared” to sell mortgages.

“The scale of the problem has overwhelmed the banks,” he said.

The arrears rate for buy to let mortgages is much worse than the situation in residential mortgages. Lenders needed more staff and better expertise and systems to deal with problem mortgages, he said.

Free Legal Advice Centres said yesterday increasing mortgage arrears was “another red flag” for Government to speed up its reform of debt laws.