Thousands of families at risk as COVID mortgage relief to end in days


The Government is to haul in the five major banks and insist they help thousands of struggling families whose pandemic mortgage breaks are due to end in six days’ time.

Alarmed ministers fear that many out-of-work homeowners will fall into default and face losing their homes.

Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath will meet the banks on Monday and insist they extend the COVID-19 payment breaks, due to be wound up at the end this month.

Fianna Fail backbencher John McGuinness told Minister McGrath to go into that meeting with the banks and ‘kick their ass’.

When the payment breaks end, thousands of homeowners will also find their mortgage repayment has gone up by €40 or €50 a month, as interest not paid during the break will be added on by the lenders.

However, Mr McGuinness told Minister McGrath to ‘make sure’ there were no evictions arising from the end of the moratorium and to make sure ‘families are not charged’ interest on top of any break extension.

Unless these breaks are extended before September 30, tens of thousands of borrowers risk falling into distressed debt.

With unemployment high and cuts to the Pandemic Unemployment Payment (PUP) in force this week, there are fears many of these households will be unable to resume their mortgage repayments.

Figures published this week by the Central Bank show that 74,000 mortgage payment breaks have been granted by the five retail banks since the outbreak of COVID-19.

Lenders give a three-month break with the option of a further three months, without the risk of falling into default under emergency guidelines introduced by the European Banking Authority (EBA) in March. The Banking and Payments Federation says 37,000 of these borrowers are already on the three-month extension with their breaks due to end in the coming days.

David Hall, of the Irish Mortgage Holders Organisation, said the end of the breaks means ‘difficult times’ for homeowners not back at work. He told the Irish Daily Mail: ‘Some have returned with reduced hours, some are receiving the pandemic payments, so it’s a very chaotic system at the moment with massive levels of uncertainty.’ Minister McGrath told Fianna Fail TDs that they were focusing on an ‘extension on the mortgage payment breaks’ and discussing the ‘availability of credit’ to businesses around the country. Mr McGuinness also asked him to tackle the banks on ‘failing to support the SME sector’, saying banks are not approving loans for projects approved by the Strategic Banking Corporation of Ireland.

Sinn Fein leader Mary Lou McDonald told the Dail this week: ‘There are 37,000 households whose mortgage payment break is due to end in the coming days and there are many thousands of businesses in the same boat.’ She added: ‘Banks and lending institutions need to act now to ensure that these 37,000 families and the businesses are not plunged into further financial hardship.’ This comes as thousands of people receiving the Pandemic Unemployment Payment (PUP) saw their entitlement fall by up to €100 this week.

There are 209,941 people claiming the PUP but there are fears this will rise in the coming months as we face into a winter COVID crisis with more regional lockdowns likely to be enforced.

A spokesman for the Department of Finance last night said Minister Paschal Donohoe will meet the CEOs of the five retail banks and the banking federation next week. He told the Mail: ‘Although the EBA announced there would be no further extension to the guidelines which provided regulatory flexibility to banks who offered borrowers a temporary payment break due to COVID-19 beyond 30 September, all applicable consumer protections remain in place.

‘Banks will consider requests for payment breaks on a case by case basis.’ Meanwhile MABS, the Money Advice and Budgeting Service, has referred people seeking advice to contact their lender directly. If they feel unable to do so, MABS will contact them on their behalf.

Meanwhile, at the Fianna Fail meeting, Senator Malcolm Byrne is quoted as saying he was happy Micheal Martin took TD Marc McSharry’s advice at a previous meeting and gone ahead with a solo press conference last week.

This was in reference to Mr MacSharry telling the Taoiseach to stop doing press conferences with Leo Varadkar, who was ‘running rings around him’. But Mr Martin did not take the joke well and the senator was quick to point out that he was joking.

Jackie Cahill TD said the Taoiseach was left on his own in Dail yesterday, with just two Government TDs, as he faced a Sinn Fein onslaught on the PUP being cut and ten new special advisers going to junior ministers.

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