THE NEW free financial advice service for mortgage holders in financial distress, unveiled yesterday by Minister for Social Protection Joan Burton has been widely criticised as being too little, too vague and tokenistic.
The new Mortgage Arrears Information and Advice Service offers mortgage holders in serious difficulty advice from an accountant, for which their lender will pay.
The borrower must have already been through a process with their bank and have reached the point where the bank is making long-term proposals about how they may continue with the mortgage.
“When a lender is proposing longer-term mortgage resolutions will advise the borrower to obtain independent financial advice on the proposed arrangement and, if the borrower wishes to avail of this option, that the lender will pay €250 to an accountant of the borrower’s choosing for the provision of this advice,” said Ms Burton.
However, concerns have been expressed by Opposition TDs and groups such as Flac (Free Legal Advice Centres) and New Beginning.
Noeline Blackwell, director of Flac, said distressed borrowers needed advice and support while they were coming to a resolution with their lender, not after the bank has made its proposals. “There is no element of legal advice to people whose position is substantially changing throughout this process. People are being left effectively to take on the might of a commercial institution that is the lender, by themselves.” She was concerned that the supports being provided were “piecemeal”.
New Beginning, which represents distressed homeowners, said it was “most concerned that the accountant is not permitted to inform the distressed borrower of other resolution options available to them but only on offers presented by the bank”.
Fianna Fáil finance spokesman Michael McGrath described the scheme as a “major disappointment”, saying it would be available only “to a fraction of those in mortgage distress” as it was open only to those who had been offered long-term resolution proposals by their lenders.
People Before Profit spokesman on finance Richard Boyd Barrett said the scheme was “window dressing”.
“It will be of little help to distressed mortgage holders unless the Government inserts specific protections for the family home into the new personal insolvency legislation.”
Ms Burton said she was "fully aware there no quick-fixes or a one-size-fits-all solution to the mortgage debt problem". The key message was the need to engage with lenders, she said. The helpline is 076-1074050, or you may consult keepingyourhome.ie
