Tiptoeing about the failure of the repossession system in Ireland would serve nothing. Appearing before the Housing and Homelessness committee, the Irish Mortgage Holders Organisation labeled the system as “cumbersome and slow”. The non-profit organisation underlined that this is one of the reasons why the poor repossession system has not lead to more evictions.
What is the Irish Mortgage Holders Organisation?
The Irish Mortgage Holders Organisation is the sole non-profit organisation in Ireland acting as an intermediary between lenders and creditors and mortgage holders. Together with the support of local and international organizations the Irish Mortgage Holders Organisation works to design efficient processes that can lead to the right solutions for cash-strained debtors. In 2015, the organization gave assistance to more than 2,500 individuals in need. The actual Chief Executive is David Hall who is also one of the co-founders of the organisation created in 2012.
Vulture funds
According to David Hall, the failing repossession system is giving rise to “vulture funds” and to an intolerable mental pressure on mortgage holders. Statistics point out that there are approximately 13,000 vulture funds that have accumulated arrears for over two years. These vulture funds have to be carefully approached as they do not refinance investment properties. They neither have any long-term endeavours to support the housing policies in the country.
A gloomy scenario
The stark reality is that Ireland is facing a homelessness crisis. At the Oireachtas Joint and Select Committees in May 2016 David Hall expressed himself with great concern, backing his statements with statistics: more than 5,000 people are in emergency accommodation, 33,000 family homes are facing repossession, representing more than € 2 billion as arrears. A further 20,000 cases of repossession are presently before court. An additional 15,000 investment properties are also in the red zone with arrears piling up since two years. David Hall is of view that this represents a “dysfunctional rental market”.
Proper restructuring
The Chief Executive of The Irish Mortgage Holders Organisation underlined that one of the greatest steps leading to redress the failing system would be to review the code of conduct on mortgage arrears. Presently voluntary, it would be more beneficial if rendered statutory. The second option proposed is to urge the two State-owned banks to be more responsible and should bring forward precise information regarding mortgage loans debts.
According to David Hall, the rent allowance incurred by the State should be reviewed to lighten the burden on the government. Individuals able to pay part of their rent should be allowed to do so. This option is actually not authorized by the Central Bank’s conditions for sustainability. If remedied, these borrowers will be able to continue staying in their houses and the government will not have to disburse rent allowance for them. He also urges to redress the imbalance between the “rich” mortgage borrowers who, for example, are owners of very expensive houses, and those who are struggling to own a simple home.
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