Thursday, April 14, 2011

Respond calls for debt relief measures for homeowners

The housing charity Respond has called on the government to consider putting pressure on the banks to forgive some of the debt owed by more than 80,000 homeowners who are experiencing difficulties with their mortgages.  

The Respond organisation has claimed that the government should prioritise what it calls, “the mortgage arrears crisis” following this week's announcement of an interest rate increase by the European Central Bank (ECB). 

According to the charity, the ECB's rate rise from 1% to 1.25% has left many families bracing themselves for the impact on their budgets. 

Respond, which has been housing lower-income families and individuals for over a generation, acknowledges that the Government is proposing a two-year moratorium on home repossessions and the greater use of mortgage interest supplement.  

However, speaking this week, Respond's spokesperson Aoife Walsh said that these are only short-term solutions. 

In a statement, Respond urged ministers to consider options such as the banks agreeing to forgive the borrower the outstanding debt after his or her home has been sold and the proceeds handed over in part-payment. 

Walsh said that while the bank’s calculate that one in ten households are in arrears on their mortgage, the actual number of home owners in arrears is likely to be much higher due to many banks increasing their interest rates before this week's announcement by the ECB as well as the impact that last January's Universal Social Charge (USC) has had on reducing incomes.