Sir, – Your learned reader’s comments (Eithne Reid O’Doherty, January 28th) on the urgent need to tackle personal insolvency is absolutely valid both in terms of the delay in signing the legislation into law, primarily to facilitate the banking sectors, and her reference to the families who are waiting on a weekly basis for some resolution to the mortgage crisis.
The new director-designate of the new Insolvency Service of Ireland has been appointed but right now he has no permanent offices, no corporate governance guidelines, no IT system, and has only a skeleton staff.
Despite that, a public information campaign will apparently start in March with applications from struggling mortgage holders to begin in the second quarter of the year. It will be interesting to see when exactly the first cases will come out the other end of this new system.
This legislation tars all struggling mortgage-holders with the same stick. It absolutely should be used to help people who took out mortgages on properties in cases where the loans were sanctioned by the banks based on proper calculations of ability to repay but changing circumstances since then have created difficulties in making repayments.
But it was indiscriminate over-lending by the banks that helped to bring this country to its knees. Loans were sanctioned by the banks when it should have been clearly evident to the bank at the time of application that there was little or no hope of the loan(s) ever being repaid. This was reckless lending, in which the banks ignored standard banking practice and allowed carelessness in loan approvals. There was no definition for reckless lending during the boom, nor is there one now.
It doesn’t even get a mention in the personal insolvency legislation – strange! – Yours, etc,