Government considers arrears plan to help borrowers

The government may set up a system to protect mortgage borrowers who have fallen behind in their payments from having their home repossessed, Communications Minister Eamon Ryan said.

“It’s in no-one’s interest for this to go into the courts,” Ryan told RTE Radio yesterday. “It’s far cleverer to work through it in a flexible way that supports both parties.”

Some 3.3pc of Irish mortgage borrowers are at least 90 days behind in their repayments, the Financial Regulator said in December.

While the plan to cleanse the country's largest banks of toxic loans and ensure they have adequate capital is in the “public good,” Ryan said lenders would also have to play their part to help the economy.

“We’re going to have to go in and do further work with our banks to make sure they have the right capital,” the minister said. “They also need to assist the country and the public good to help people through mortgage problems and debt problems.”

The government will set up a panel of experts to advise it on how to deal with the growing number of people failing to meet mortgage repayments.

In the so-called Program for Government published after the 2007 election, the government said it would look at options that could be used to avoid foreclosures, including reduced rates or longer loan maturities.

Other options listed include a bank taking equity in a property or taking full ownership and renting back the property with the rent payments coming off the loan.