Taoiseach Brian Cowen has said the number of mortgages-holders in arrears represents a “real economic and social problem”.
Welcoming the publication of an interim report by the Mortgage Arrears and Personal Debt Review Group, Mr Cowen said over 30,000 mortgages are currently in arrears for 90 days or more.
While a similar number is estimated to have entered into forbearance arrangements with their lenders, Mr Cowen said the level of repossessions in Ireland “remains very low”.
The Taoiseach said it was the Government’s objective to develop new measures to help those who are experiencing difficulties with their mortgage payments “and to examine ways of expanding our own mortgage-support measures”.
Mr Cowen acknowledged the impact that increased unemployment and the collapse of the property market was having. “We fully recognise that the rise in unemployment and the fall in house prices means some people are in serious difficulty with their mortgages and we need to minimise the economic and social consequences from the problem of mortgage arrears,” the Taoiseach said.
Mr Cowen said the “practical recommendations to help people in difficulty” should limit the number of repossessions and help borrowers and lenders agree a solution which will allow borrowers remain in their homes.
Mr Cowen said the Financial Regulator has agreed, “where possible”, to implement the recommendations without delay.
“The group has provided us with a lot or practical, deliverable and balanced recommendations which help us manage through a problem affecting many families”, Mr Cowen added.
The terms of the Government’s mortgage interest supplement scheme (MIS) will now be revised.
Minister for Social Protection Eamon Ó Cuív said the revision will ensure support for those unable to deal with mortgage arrears is better targeted.
The revision will also seek to ensure that lending institutions “share responsibility with the State in a balanced way”, Mr Ó Cuív said.
The Minister said has asked his officials to draw up a draft time-table outlining possible timescales for the implementation of the report.
A number of recommendations have been made including the removal of a rule preventing payment of MIS to couples where one person is working in excess of 30 hours. It is also recommended that all legal action by the lender should be postponed while MIS is being paid to the lender where the borrower has adhered to the agreed arrangement with the lender.
Green Party Minister Eamon Ryan said the measures threw "a much-needed lifeline to the 60,000 people in Ireland having difficulty paying their mortgages".
"The greatest lesson in dealing with debt management is that the sooner people face up to it, the easier it is to manage," he said.
Mr Ryan said the Green Party insisted on new provisions for debt management in the renewed Programme for Government last October.
“Today demonstrates yet again how the Green Party’s presence in Government is making a real and positive difference to Irish people in their daily lives.”
Labour Party spokesman on housing, Ciaran Lynch, said the report was “long on aspiration and short on detail”. It did nothing to resolve the imbalance of power between borrowers and lenders, particularly when it came to dealing with arrears.
He said one of the only specific proposals was that the moratorium on repossessions should not be extended.
He said serious consideration needed to be given to ideas such as the reform of existing supports by, for example, liberalising mortgage interest relief by decreasing waiting times and increasing maximum mortgage.
Mr Lynch also suggested the introduction of a mortgage rescue scheme whereby the moratorium period would be extended to two years. Matters such as penalty interest on arrears and the reform of bankruptcy laws would be dealt with by legislative reform.