*** PRESS RELEASE *** TASK FORCE REPORT INTO NI NEGATIVE EQUITY PROBLEM

GDP Partnership welcomes the recent publication of the Initial Research Report by the Repossession Taskforce. Since 2011 Our company has been obtaining sustainable solutions for distressed borrowers facing repossession proceedings and the impact of Negative Equity on their home and their lives.

There are a number of key points made in the report by the Repossessions Taskforce:

• The Borrower profile in an NI context;
• Negative Equity;
• Ability to pay / Arrears;
• Forbearance; and
• Possessions.

The NI Government has recognised they need to help create the right conditions for a stable and sustainable housing market. The starting point is support for those currently experiencing difficulties with their debts and sustaining home ownership. Nelson McCausland, the Minister for Social Development who instructed the Taskforce concluded: “The earlier borrowers receive advice and engage with their lender, the more likely they are to arrive at an affordable and sustainable solution.”

Although we always welcome a proactive approach to problems, our overwhelming view for the most part would be that there is no new information in this report , which is somewhat disappointing.  We certainly welcome the interest now being shown by the Government into this serious “bread and butter” matter for the general electorate. We encourage this activity but at the same token fail to understand why the Taskforce was unable to obtain a full understanding of the NI debt problem.

In order to do so, our view would be that the Taskforce needed to engage with all of the stakeholders involved. The key stakeholders are the banks, the judiciary, the professional debt advisors and most importantly the distressed borrowers. Since 2011 GDP Partnership has been Irelands leading team of debt mediation professionals having engaged with banks on behalf of 100’s of borrowers and SME’s facing repossession and negative equity challenges.

This report has been eagerly awaited since its inception and unfortunately no new solutions have been offered by the report.  I would suggest it has been a useful fact find for Government, however we find ourselves asking the question, What happens now?

For example, In the Republic of Ireland over the past 18 months there are a number of solutions being made available to distressed borrowers, which has helped many people move forward.  AIB offer a number of options such as “debt for equity” and “split mortgages” which goes some way to solving some of the issues.  It’s very disappointing then that First Trust Bank in Northern Ireland for example, owned by AIB, do not offer similar solutions to their NI customers.  Why would this be so?

The fact remains post the report that the position of many borrowers, households and communities continues to be blighted by negative equity, repayment arrears and the risk of repossession. Unfortunately with our Finance Minister Simon Hamilton confirming of late that the austerity program will continue through to 2020 along with the rise in interest rates – this problem is about to exacerbate. 

 

Education around any issue is key to finding a solution.  We would echo Minister Mc Causland’s view, that borrowers need to engage with their lenders.  However to qualify this, in order to do so they need to come from an informed position, and have a full understanding of the process.

 

Darwin Allen AABRP

Senior Relationship Manager