Minister for Communications Éamon Ryan last Sunday committed the Government to find a solution for the growing number of homeowners who are in difficulty with their mortgage repayments. The Green Party minister said that a team of experts will be established shortly to come up with proposed solutions by summer. The expert group will look at solutions implemented in other jurisdictions and recommend specific solutions.

During the week there seemed to be a difference on the approach to this issue between Minister Ryan and Minister for Finance Brian Lenihan. The end result is, however, likely to be the same.Later in the week the Financial Regulator told mortgage companies, including sub-prime lenders, that they cannot take legal action against a defaulting home owner for one year after the owner first defaults on a loan repayment. Exceptions will be made for those deliberately withholding payments.

Under a voluntary code, AIB and Bank of Ireland had already agreed to this restriction but now it is legally binding on all mortgage companies.

It has been pointed out that repossessing houses that have fallen in value by up to 50% is the last things the banks want to do. Apart from then trying to sell the property in a declining market, the bank would have to record a loss in its books.

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