Minister for Finance Michael Noonan has issued a warning to the banks to co-operate with a new Government plan to settle the personal debt crisis, saying they have no reason not to.
The initiative, to be unveiled tomorrow, marks a new effort to tackle tens of thousands of mortgage arrears. The plan includes measures to facilitate repossession as a last resort, with the focus on the owners of investment properties who are in default.
Revenue website
It comes amid criticism of a new Revenue website setting out property valuations as the tax authority contacts 1.66 million homeowners with estimates of their property tax liability. Revenue has reported some 207,000 "hits" on the site on Sunday after it went live but has no figure for the number of individual unique users who logged on.
Mr Noonan said the mortgage arrears crisis has festered for too long and that the Government was disappointed it was not settled earlier.
“This has to be dealt with in the interest of the people who are in debt because they can’t manage their full mortgage repayments, but also in the interest of the country,” he said in Limerick. “You can’t have 100,000 families in a small country not participating in the growth of the economy and they can’t participate if they are burdened with debt.”
Although the banks have claimed they lacked the tools to confront the problem, Mr Noonan said that was no longer the case.
“The banks themselves lacked staff who could inter-relate with people who had impaired mortgages but they have trained up significant numbers of staff now and they have the menu of solutions, so there is no particular reasons why they wouldn’t proceed and they are committed now to proceed and we will have details of the arrangements they have made with the Central Bank going on later this week.”
Mr Noonan backed Department of Finance secretary general John Moran, whose remarks last week on repossessions went down badly with some Cabinet members.
Buy-to-let
He said the mortgage system would collapse without the threat of repossession and said landlords collecting rent on buy-to-let properties should pay the interest on their mortgages.
“The policy is in terms of personal mortgages on family homes is that repossession would be a last resort but you have to have repossession as part of the set of solutions because many of us have mortgages and we know the basis of it. You get a loan and the deeds of the house are taken by the bank and if the deeds are no use and they can never get possessions of the property, why would you pay?” Mr Noonan said.
