Troika urges action on mortgage arrears
Irish Examiner -
Slow progress on tackling the mortgage debt crisis has been singled out as a major concern by the troika.
Bailout chiefs have urged the Government to get a firmer grip on the situation as they warn that credit card bills are being prioritised by struggling families instead of home loan repayments.
With the Coalition yet to issue firm guidelines for the new Insolvency Service aimed at helping people in financial distress, the EU/IMF/ECB troika has told ministers to treat the issue with more urgency.
A top level report on how the economy is fairing which is set to go before the Oireachtas and its German counterpart gives a strict warning on dealing with the debt issue.
“The high level of loan defaults on banks’ balance sheet raises concerns about potential future losses,” the document states.
“In particular, the high level of mortgages in default is a persistent source of concern.”
The troika zeroes in on households prioritising credit card debt as a destabilising factor.
The report claims debtors may have fallen into an area of “moral hazard” because they know repossession is harder after a 2011 High Court case which put a legal brake on many such actions.
“Specifically, banks report that a significant number of consumers are prioritising unsecured debt over the repayment of their secured mortgage debt,” the document states.
Read More: irishexaminer.com
2013-04-04 01:18:58
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