merrion street

Social Protection Minister Joan Burton today welcomed the contributions from the many concerned groups that have issued statements in response to the publication of the report of the Inter-Departmental Mortgage Arrears Working Group.

The Minister said she had today asked her Department to invite the various stakeholders in the mortgage and personal debt debate to a forum to be held in November.  She said she was looking forward to hearing their views on recommendations in the Keane report, such as to curtail mortgage interest supplement through provision of mortgage to rent schemes and proposals to support people in arrears through an independent mortgage advice service.

The Minister said:

Mr. Keane has recognised that the mortgage arrears problem is complex and that it requires a complex set of solutions.  But I believe one of the key recommendations in the report is the early introduction of new judicial and non-judicial bankruptcy options.  I agree with Mr. Keane that ‘without effective bankruptcy legislation the mortgage arrears problem will not be solved'.

The Minister also recognised that any proposed solutions must take all debt liabilities in to account to be effective. Minister Alan Shatter is currently preparing the outline of legislation on personal insolvency as a matter of priority

Minister Burton welcomed the proposal in the Keane report to establish a new mortgage support and advice function:

I welcome the suggestion to appoint over 100 advisers with financial, accounting and legal expertise to help borrowers in mortgage arrears in their discussions with their banks. The idea is that the service would work closely with the Citizens Information Board’s money advice and budgeting service which is funded by my Department. But this new service, while operating under my Department, will be funded by the banks.

A large portion of the Social Protection budget is currently swallowed up dealing with the fallout from the banking crisis. My Department is spending €77 million on Mortgage Interest Supplement which effectively is a support to the banks. We also spend about €18 million on the Money Advice and Budgeting Service. And we spend more than €500 million on Rent Supplement.

I would far prefer to see the banks use some of the billions in capital they have already been provided with to write off bad debts which borrowers cannot afford to repay rather than supporting the banks with even more taxpayers’ money from the Social Protection budget.

she concluded.