A CLARE mother-of-two, who is facing the prospect of having her family home repossessed, has called on the Government to put a new scheme in place to help people in financial difficulty to restructure their loans.
The 40-year-old woman is running out of options in her desperate bid to retain the family home after falling over a year in arrears with her mortgage.
About two months ago, a representative from a building society called to a neighbour’s house and left a note for the woman outlining the need to make payments to safeguard her home. Her solicitor has also received regular correspondence from the society about the amount of arrears.
Official statistics have revealed there are 28,600 people who are more than 91 days in arrears, while 77,5000 have fallen behind in payments for any duration with 8,328 mortgage holders nationally entering the legal process.
After separating from her husband in 2000, the mother divorced in 2004 and decided to take out a new mortgage of €190,000 including personal loans in 2000 because she wanted to hold onto the house and couldn’t afford to buy out her spouse.
Monthly payments increased from €800 to €1,200 following increases in interest rates, which she was able to meet when she had a job in Shannon. Between 1999 and 2003, she held two jobs working 9 to 5pm in Shannon and from 6 to 10pm when she got home earning a combined annual income of over €42,000.
In fact, she has paid PRSI and PAYE for over 20 years until she was made redundant back in December 2008. Once her redundancy package of €7,000 ran out, she started having difficulty paying the mortgage for her four-bedroom house and meeting the bills. 
The Money Advice and Budgeting Service (MABS) came up with a plan to help her get out of financial difficulty advising her to pay €100 a week towards her mortgage. However, she only left €118 a week out of her lone parent’s allowance of €218 to raise two children, which wasn’t feasible.
“The constant costs of raising two teenage daughters are unreal, there is always something to pay. I have one daughter in a Limerick secondary school.
“I lost my job in December 2008, since then I have not been able to get work, I have tried everything including doing an interview on RTÉ last year, in the hope of gaining employment but to no avail.  I have sent out hundreds of CVs and have cold called companies and still nothing. 
“I have also been turned down for Mortgage Interest Supplement in the spring of 2009 because at the time I applied for my mortgage, I was working two jobs and it was decided by HSE that I should never have been given a mortgage in the first place.
“My health has suffered over the last year. I have had several sleepless nights over where I will find the money to live. My own mother also had breast cancer and I didn’t know whether I was coming or going. I have had the house valued at €280,000 a few years ago but at this stage, I am afraid to ask.
“Houses are not selling in his area at the moment. Even if I did manage to sell the house, I will not get a mortgage now because my credit rating is very low after defaulting with the mortgage.
“I have been told by the council I wouldn’t be eligible for shared ownership because of my means. The whole situation is soul-destroying. I feel I have nowhere to go. I have tried everything and nothing has worked.
“The Government can bail out the banks, why can’t they put something in place to help people who are in financial difficulty? I would love to get a job and would gladly pay my mortgage if I got work.
“The Government seem to be willing to let people become homeless. The banks would put the fear of God into you. I have worked hard all my life and when it comes to getting help, I can’t get any,” she said.
A HSE spokeswoman said that because an application for MIS was made in 2004, this file was not available as it is over five years ago. “Each case is dealt with individually to ensure that all relevant details are taken into account,” she said.
Defence Minister, Tony Killeen pointed out recent Government reports on the Irish banking system had confirmed there would have been a total collapse of the banks if the Irish Bank Guarantee Scheme and financial institutions weren’t bailed out.
Minister Killeen said he understood that legislation had been put in place preventing banks from repossessing a family home for up to one year once a person fell into arrears.
Acknowledging there were numerous genuine hardship cases including this individual story, Deputy Killeen said it was very difficult to introduce a scheme to cover all eventualities such as loss of employment, change in family circumstances, marriage and relationship breakdown.
He pointed out it wouldn’t be easy to provide any new financial support scheme in terms of the overall cost and trying to administer it fairly.
“I have dealt with a number of individual cases like this where a number of different options were examined,” he said.
Deputy Pat Breen said the Government had rejected a Fine Gael plan in the guise of the Homeowner Support Scheme, which would allow NAMA to take an equity share in a property after negotiating a write-down in the outstanding debt with the relevant financial institution. 
Deputy Breen explained the property owner would then service his or her remaining share of the debt and pay a rental fee to NAMA for the equity share taken by the agency. The homeowner would have an option to buy back the NAMA equity share and if the property is sold, NAMA will receive its share of the sale.
Describing the Government’s response as inadequate, Deputy Breen noted that the Mortgage Interest Subsidy Scheme has assisted 15,000 families. In spite of this assistance, the reality is, he says,  “The number of mortgage holders in arrears is still increasing. The Government’s response is to set up a Debt Review Group to report to Finance Minister Brian Lenihan instead of taking decisive action.”

Carey launches personal debt initiative

THE issue of personal debt and the ability to repay, is one of the most significant pressures now facing young Clare families and individuals, Deputy Joe Carey has warned.
Deputy Carey has revealed that his constituents are in contact with his office on a daily basis outlining their concerns about their financial worries.
While the national focus has been on bailing out bankers and friends of Fianna Fáil, Deputy  Carey stressed action needed to be taken to help individuals up and down this country who were in financial difficulty.
Over the past months, Deputy Carey, who is a member of the Joint Oireachtas Committee on Social and Family Affairs along with his constituency office, have been working on a comprehensive response to the growing issue of personal debt.
He has outlined several measures he believes the Government need to take immediately to ease the increasing burden on families an individuals.
These measures include an update on bankruptcy legislation; the introduction of individual voluntary arrangements (IVAs) for private individual; bringing consumer advocate groups, such as MABS, into the Government Taskforce review and tackling the growing transfer for mortgage debt into personal debt via credit cards and overdrafts.
While businesses have recourse to examinership legislation in order to restructure their debts, Deputy Carey expressed concern that private individuals have no similar options.
The IVA process, as used in the United Kingdom, is a means to address this type of imbalance. It is a means by which individuals in debt up to a certain amount can get assistance in restructuring and negotiating their debt issues.
Deputy Carey believes that the level of personal debt in Ireland will hamper the country’s potential to recover and bounce back from the global recession.
He called for the establishment of a principles based system allowing for debt resolution in a way that limits overall costs to society.
“Debt forgiveness or structured write down has to be earned – there cannot be any suggestion of a free lunch or allowing for free riders. Abuse of any reformed system should be dealt with in a more stringent manner than that which exists previous to adoption or availing of the proposed system.
“Last spring, the Mortgage Arrears and Personal Debt Review Group Task Force was established by the Minister for Finance. It would appear to be imbalanced.
“It does not include representation for consumer advocates with credible professional expertise in consumer indebtedness and consumer protection. People such as MABS, Credit Unions and voluntary bodies such as the Vincent de Paul would offer a valuable perspective. These exclusions are telling,” he claimed.
“It is difficult to see how consumer interests can be fully, appropriately and expertly included for in the forthcoming report from the group as currently constituted. I am calling today for these groups to be brought into the process and have asked the minister directly to do the same.”
“Mortgage debt is different from personal debt in that it has a deep connection with people’s sense of security and safety in their family home,” he said.
He said recent comments by the Financial Regulator indicated a lack of appreciation of the hardships and pressures on young mortgage holders who have been encouraged by the last number of governments to pay excessive prices for what could only be considered as modest family homes.