TAOISEACH BRIAN Cowen has insisted that the Government is endeavouring to provide “confidence and reassurance” that homeowners with mortgage difficulties are dealt with in a “humane and sensible fashion”.
Mr Cowen was responding in the Dáil to Labour leader Eamon Gilmore who said that the proposal by AIB and Bank of Ireland that they would delay issuing repossessions orders for 12 months “is not good enough”.
Mr Cowen also indicated that other lenders would have to apply the same principle. He said that people in difficulties who “honestly and reasonably” work with financial institutions, would have a reassurance of “no precipitative action” by lenders “including those who have been outside the voluntary code who must now come into the statutory code in my opinion”.
Mr Gilmore said, however, of the 12 months’ delay that “all that is doing is putting off the evil day for 12 months”.
He added that, in line with the view of the Money and Budgeting Services (Mabs) and the St Vincent de Paul Society, “what is required here is a period of two to three years where people will have reassurance in respect of their family home, that it’s not going to be repossessed”.
“In any event, the idea of just delaying the repossession, delaying the inevitable for 12 months misses the whole point of this.
“The whole point of this is that people who are losing their jobs or people who are worried about losing their jobs and who have the additional worry that they might lose their home, need some reassurance and that needs to be provided by Government securing that arrangement from the financial institutions.”
He asked Mr Cowen: “Can you give to families this evening a reassurance and a security and sense of safety that their home is not going to be repossessed having regard to discussions, the very considerable resources the State is making available to recapitalising banks and to underpinning the financial institutions of the State?”
Mr Cowen insisted, however, that the Government was seeking to address the issues “particularly the question of private residences, that those are dealt with in humane and sensible fashion for people who have difficulties at the moment”.
He said that the whole purpose of that part of the discussions with the banks “is to provide reassurance to people that those who honestly and reasonably take account of changed circumstances on the basis of contact with the bank and working with the lender to try and reschedule arrangements” would have “that assurance that there won’t be a precipitative effort”.
There was already a low level of repossessions, with 0.3 per cent up to last June.
But Mr Gilmore said that “there have been an awful lot more repossessions of homes than there have been repossessions of sites and half-finished developments of some of the speculative developments that were the subject of what are now called the bad debts and the bad loans”.
He added: “We seem to have a regime in this country where we’re about to recapitalise big loans and repossess small loans. And saying there haven’t been many repossessions doesn’t do it because there have been a huge number of voluntary surrenders.”
Rejecting this, Mr Cowen said that they were trying to “provide reassurance to those people who get into any difficulties in relation to their principal private residence”.
