PROPOSALS for a mortgage advice service, employing 100 financial advisers to assist people in mortgage arrears, could cost up to €6 million and would be paid for by the banks.
An interdepartmental committee set up to examine how to deal with the mortgage debt crisis recommends the establishment of the independent service to guide people in mortgage debt.
There is speculation that the Money Advice and Budgeting Service (Mabs), could be “beefed up” to provide this service.
Mabs 2, as it has become known, would have a “sunset provision” where it would last for three years, in order to encourage full participation and co-operation from the banks.
Former AIB internal group auditor Eugene McErlean, who exposed overcharging at the bank, has been appointed to the Citizens Information Board, which has responsibility for Mabs.
The Department of Finance has dampened speculation about immediate significant measures to help mortgage holders in arrears.
The interdepartmental committee from the Departments of Finance, Environment and Social Protection is also understood to have recommended that along with an independent mortgage advice service, personal insolvency legislation should be brought forward at the same time.
Under current legislation once a person declares bankruptcy, it takes 20 years to discharge that bankruptcy.
Current proposals reduce insolvency to five years, while the committee is understood to recommend three years.
