We have new neighbours next door, because houses have begun to sell again in our estate. For some people, these signs of modest economic recovery only serve to deepen their sense of shame and isolation due to the constant stress of being trapped in mortgage arrears.
The latest Central Bank figures show a decrease in mortgage arrears, yet the statistics are still frightening. There are about 750,000 residential mortgages in Ireland, and more than 92,000 of those are in arrears – about one in eight.
Some 121,000 mortgages have been restructured, but these people are vulnerable to any economic shock, from a rise in interest rates to job loss, which could tip them over the edge again.
The figures are scary, especially when we are reminded of what the banking inquiry report politely calls a “culture of excessive executive pay” in the banks that gave unsustainable loans in the first place.
Obscene levels of compensation for incompetence and greed might be closer to the mark. Years on, there is still a sense of stigma that blocks people from accessing help. I know people who have been driven into serious ill-health by the verbal abuse they have received from a bank, despite every attempt to do the right thing by engaging with the lender.
I also know highly intelligent, competent people who simply did not open bank letters and let the phone ring until the battery went dead, unable to face the enormity of the crisis facing them.
No one should have to go through that alone. There are reliable, experienced agencies willing to help: for example, Mabs, the money advice and budgeting service.
Government-funded help
Not too long ago, Mabs seemed to be sidelined in favour of farming out insolvency advice to private and for-profit agencies. Belatedly, the Government seems to be recognising that it is wasteful and foolish to bypass an organisation with more than 20 years of experience in helping people cope with debt.
As a result, Mabs has been designated the gateway for a Government-funded scheme to help people who are insolvent and in mortgage arrears to access independent expert financial and legal advice.
Access will be provided to advice and representation from a personal insolvency practitioner, a specialised Mabs adviser, or a solicitor, as needed. Where people meet criteria, there is a Government commitment that it will be free.
A cynic might smell an upcoming election, but regardless of motivation, it is an important initiative.
One of the great things about Mabs is that they see the whole person and family, not just someone struggling to pay a mortgage. They recognise that there is no point in repayments that lead to desperate juggling just to feed children.
Their key objective is to keep people in their homes, with enough income for basic needs. Before Christmas, seven repossession orders were granted in Wicklow Circuit Court on family homes, although most had stays to allow people to find alternative accommodation.
The county registrar, Marie Delanty, scolded one person for only having made contact with Mabs that morning. However, many people still do not know Mabs exists.
Dazed and numb
People are dazed and numb from the long struggle. I even know of a case where a reasonable accommodation was offered by a bank, but the couple involved felt so beaten down that they were afraid to sign it, as their trust had been demolished. With a calm, experienced, qualified negotiator in their corner, that need never have happened.
The national mortgage-to-rent scheme was supposed to be one of the avenues for distressed mortgage holders. It was targeted at people in the arrears resolution process who could not afford to pay their mortgage now or in the future.
To qualify, houses cannot be valued at more than €350,000 for homes in Dublin and the surrounding commuter belt, with a ceiling of €250,000 everywhere else.
The home is surrendered and sold immediately to a housing association, which then charges rent, with secure tenancy and the option to buy back the home if circumstances improve after five years.
For many people, it would be an ideal solution. But it has had very limited uptake. Anecdotally, it has been hindered by an assumption by local authorities and lenders that helping people out of dire situations will discourage others from making sincere efforts to repay.
This ignores our attachment to home owning in this country. It also ignores the vast amount of pain and personal harm being inflicted every day on families who cannot repay mortgages. As Enda Kenny said two years ago, "A situation whereby children, in particular, are homeless is not one that anybody can condone."
As it stands, the mortgage-to-rent scheme is cumbersome, with too many bodies involved. Streamlining the process, and shaking both local authorities and lenders out of their entrenched negativity should be a priority.
Meanwhile, whether you are just beginning to struggle with repayments, or are at the very end of the long road where the next turn brings homelessness, contact Mabs.