The tragic death by suicide of former Priory Hall resident Fiachra Daly has put the exploding mortgage crisis centre stage. The brave decision by his partner Stephanie Meehan go public at this difficult time for her family has put the human face to the tragedy of this financial meltdown.
Fiachra had been a staunch campaigner for justice for the 300 residents forced out of their homes in Priory Hall on safety grounds. In the week prior to his death he received demands from the banks looking for repayment of the arrears on the home his family through no fault of their own can no longer live in. Fiachra was 37 with children aged seven and two. Stephanie signed her open letter to Taoiseach Enda Kenny saying “I’ve lost Fiachra, but I have not lost my voice.”
Families throughout the country are in desperation, unable to pay their mortgages, terrified of losing the roofs over their heads, in many cases trapped in negative equity. Almost 100,000 are mortgages in arrears of 90 days or more, half are over a year behind , 13 per cent of all residential mortgages fall into that category. This is a social time bomb waiting to explode.
The banks have been instructed to engage with distressed borrowers in most cases this has meant a letter suggesting voluntary surrender. New rules mean the banks now have the right to seek repossession, reversing a court order from 2011. The banks do not want to come to agreements that will entail a write down of the debt as these would have to be transferred onto their loan book which would exacerbate the already precarious situation in the banking sector.
David Duffy, CEO of AIB bank has stated that one in five on the AIB loan book are strategic defaulters implying that people are choosing not to pay their mortgages in order to live the high life. In reality, six years into the financial crisis any savings or leeway families had is now used up and yes some people are choosing to feed their families rather than pay unsustainable mortgages on homes that are not worth what they paid for them. We will not take lectures from Mr Duffy and his ilk that chose to pay the billionaire bondholders and then stick the boot into struggling families.
The much heralded Personal Insolvency Arrangements has still to be finalised but is highly unlikely to assist distressed borrowers. Hopes that borrowers could exit the arrangement with a clean slate have been dashed with the announcement that banks will have a 20 year claw back!!
There should be an immediate write-down of mortgages to the real value of homes. No repossessions.