Government Report Calls for Action on Mortgage Arrears Issue
A recent Government-commissioned report has highlighted the need for a more proactive approach to addressing mortgage arrears in Ireland. The report recommends the establishment of a forum comprised of senior representatives from various departments and bodies to focus on reducing mortgage arrears. This forum would meet twice a year to oversee the implementation of recommendations made by the Mortgage Arrears Review Group and to propose additional measures to tackle the issue effectively.
In addition to the forum, the report suggests the creation of a coordinated communications strategy targeted at specific groups of mortgage holders who are in arrears. This strategy would provide information on the various options available to borrowers facing mortgage arrears and highlight the free support services that are available to help them navigate their financial challenges.
One of the key findings of the report is the ongoing challenges surrounding the legal repossession of properties with mortgage arrears. Despite the existence of legal proceedings for accounts in long-term arrears that are not restructured and classified as “not cooperating,” only around half of these cases are subject to legal action. The report emphasizes the need for improved data collection across financial and legal systems to better understand the obstacles faced by borrowers in arrears.
Recommendations for Improvement
The report puts forth several recommendations to address the complexities of mortgage arrears and improve the overall support available to borrowers. It suggests providing periodic briefings to the Judicial Council on the development of the Code of Conduct on Mortgage Arrears by the Central Bank of Ireland, as well as enhancing the professional development of Personal Insolvency Practitioners (PIPs) in handling mortgage distress resulting from marital breakdown.
Furthermore, the report advocates for enhanced personal insolvency legislation that aligns with the specific recommendations of the review group. It calls for closer collaboration between dedicated mortgage arrears advisors at the Money Advice and Budgetary Service (MABS) and PIPs to ensure a seamless support system for borrowers in need.
Focus on Mortgage to Rent Scheme and Housing for All Targets
The report also emphasizes the importance of promoting the Mortgage to Rent Scheme (MTRS) as a viable solution for borrowers struggling with mortgage arrears. By actively promoting the MTRS and monitoring its performance and uptake, the report aims to help meet the agreed targets outlined in the Housing for All initiative.
To ensure the effectiveness of the MTRS, a high-level review is recommended to begin in early 2026. This review will assess the scheme’s impact on addressing mortgage arrears and its alignment with the broader housing policy objectives set by the Government.
Minister for Finance Welcomes Report Findings
The current Minister for Finance, Jack Chambers, has welcomed the report’s findings as a valuable assessment of the State’s response to resolving mortgage arrears. In light of the significant shift in interest rates since July 2022, the report’s recommendations are seen as timely interventions to assist borrowers experiencing financial distress.
Minister Chambers acknowledges the challenges faced by borrowers in navigating mortgage arrears and encourages them to engage with their lenders and seek support through services like Abhaile, MABS, and PIPs. He emphasizes the importance of utilizing the existing consumer protection framework to find solutions that allow borrowers to remain in their homes.
In conclusion, the Government’s commitment to addressing mortgage arrears through a multi-agency approach reflects a proactive stance on supporting borrowers in financial difficulty. By implementing the recommendations outlined in the report, Ireland can work towards reducing the number of households facing long-term arrears and ensuring a more sustainable housing market for all.