Th Taoiseach has promised to look at the issue of house repossessions following the stark number of houses in arrears for over 720 days.

Over 37,000 mortgages are in arrears and Ireland has one of the lowest repossession rates in Europe.

The High court and circuit court dealing with mortgage arrears resumed earlier this month as the state and banks struggle to deal effectively with the 37,000 mortgage accounts that are in arrears for more than 2 years.

For thousands of homeowners, the untold stress caused by such financial uncertainly is compounded by the heavy threat that the outcome will see many people lose their family home.

*David (*not his real name) who bought his home in Dublin suburb in 2007, using StepStone Mortgages a subprime lender.

He received money from inheritance and wanted to spend it well, so he bought a house for €300,000 and a retail business. He also worked as a taxi driver and in construction.

It was late 2008 when things fell apart, as work dried up, the business slowed, and the landlord insisted on raising the rent by 50%.

David said they should have shut the business long before they did:

Like many people, they tried their best to keep up with repayments, and didn’t immediately try to engage with the lender.

When they did, they were given a few options – they lowered the repayments from €2,400, to €1,800 a month, but it was no use.

After that, David went to see David Hall, who advised him that he fitted perfectly with the model of the government’s Mortgage to rent scheme, where the department of the environment buys the house and the family stays in it.

However, the lender refuses to engage, even though it would be getting market value for the house. The lender is not obliged to engage in the state schemes, even if they are the most logical option.

Earlier this month, David appeared in court for the last time, after five appearances.

During the proceedings, the judge pointed to the fact that the government’s mortgage to rent scheme is not obligatory and StepStone mortgages couldn’t be compelled to engage in it, unless it had already done so in the past.

StepStone had agreed to a pilot programme of 10 cases, which the court acknowledged isn’t technically agreeing to mortgage to rent, and therefore, if StepStone can provide proof of this pilot programme, which it can – then it will repossess the house.

So, his fate was sealed.

David will likely be given a stay of 6 months and then be put on the social services housing list, or try to get private rental accommodation for him and his wife and five children.

In a demand heavy market where he’ll have to reply on rent supplement and benefits to support his family, because no job available to him will provide as much.

David Hall, the CEO of Irish Mortgage Holders Association, spoke to Newstalk Breakfast about the case and said that the judgement was disappointing, not just for the family but for "those many thousands of people who are having mortgage difficulty."

"It has been an abject failure." 

I spoke with David again this morning and found out how the issue has progressed.

I also spoke with Bill and Niamh who bought their house in 2007. Bill lost his job in 2008 and Niamh didn't have much work.

Billy explained the situation to Shona.

 

 

 Originally published January 2015