ECONOMIST Dr Stephen Kinsella of University of Limerick, has warns that the mortgage problem won’t go away, because we do not have an effective debt resolution system.
“People are individually confronting the problem, unfortunately, the court doesn’t seem to be able to come up with a reasonable solution.
“One of the biggest problems we have is that we don’t have a debt resolution system”.
The economist feels that we need to see a change in Irish bankruptcy laws.
“It seems to me to be a no brainer. We need to bring it in line with International best practice.
“Now we are seeing businessmen flying to the UK to become bankrupt. If someone is bankrupt in one member state, it covers the entire EU”.
He believes that if there is another increase in interest rates, more people will slip into arrears.
“Mortgage holders are under huge strain and the banks don’t feel like being forthcoming or co-operating.
“As interest rates rise in the coming year, more people will be driven into arrears.
“There are 44,000 people in arrears and what we’re seeing now from the regulators figures is people moving from interest only, to arrears, to eventual default.
“The banks have the Irish borrower underneath their boot and there is no real reason for them to change that’.
He is economics adviser to the New Beginning group, a representative group defending mortgage holders.
“There has been an overwhelming response, we are receiving hundreds and hundreds of calls.
“They are down at the Four Courts everyday providing a really good service. There are very few moments in your life where you are as vulnerable as you are when you face losing your home”.
Dr Kinsella described the banks as “very bust” and said that the biggest problem is the time horizon.
“Children born now are still going to be dealing with this mess in 15 to 20 years.
“For now we need to focus on Europe and hope that debt levels are addressed”.
