In this post I want to discuss the issue of Irish citizens in long-term mortgage arrears, homelessness & the housing crisis in Ireland. I certainly hope that those currently experiencing the stress of dept do not end up as my family did.
That being said, we cannot be complacent and my experience is certainly not unique. The Government could be doing more, and should be doing more to help families in distress and prevent homelessness.
Homelessness. I never dreamed it would happen to me, to my family. I can tell you from the countless other people I have met and spoken with, they didn’t think it could happen to them either.
I was taught in my first year of college as a mature student that social mobility is fairly static. I found this very depressing. I think mainly because we’re all brought up to believe in the ‘American Dream’. If you work hard enough, you can achieve anything. I worked hard at everything I did. So did my husband. Yet we never did get anywhere. We never stopped struggling.
"Homelessness. I never dreamed it would happen to me, to my family."
As my educational journey continues, I now realise that the current situation is much worse than the idea of static social mobility.
For the first time in history, our generation is worse off than that of our parents. A trend that has become normalised and accepted and I have never been more angry.
Losing my home, homelessness, and the threat of homelessness have been the most traumatic experiences of my life. Owning our own place is something I never took for granted. For a long time I had rented flats and rooms around Dublin. I didn’t miss anything about renting. The call from the landlord to say he was calling to inspect the ‘property’ or that the rent was going up… Again. I resented not having the freedom to decide on a whim to paint the walls that mad pink colour I had always wanted.
Cllr. Carly Bailey, SDCC
I ran for Local Council and was so proud to be elected because I want to make sure my children and their friends will not be left behind and locked out like we have been. I believe that when people’s needs are met, communities are stronger, safer and more vibrant.”
"Losing my home & the threat of Homelessness have been the most traumatic experiences of my life."
We were as happy as could be to have a place to call our own. I loved my pink walls. I honestly believed I would die in that house. It was our forever home. I had plans for the garden, the attic, to fill it with love and the sounds of children. Life did not go according to plan for us.
We always struggled to make ends meet, the working poor, ever increasing in this country. By the time the mortgage and other bills were paid each month, there was barely enough left over. But we didn’t mind.
We were constantly told by older generations that it’s like that to begin with. But five years on we were still struggled to make ends meet.
Next… 2008. Two babies, a credit crunch, a recession of epic proportions and then my husband’s redundancy. Reliant on social welfare and my wages, we cut absolutely everything to the bone.
It started with the obvious things. Health insurance was cancelled. Satellite TV was cancelled. Nights out were cancelled. Then we had to cut deeper. Friends weddings were cancelled. Unnecessary car journeys were cancelled. Days out with the kids were cancelled. All of those ways that memories are made… cancelled. Our family will never get these times back.
I had to call the bank almost weekly. We had to fill out endless forms. They went through our income and expenditure every three months. Each time the amounts would be questioned. I was made to feel that we were spending too much on indulgences.
They told me the amount I was spending on clothing and footwear for our children was too high. I was told I could not put by €20 a week to save for Christmas presents. I was told our health costs were very expensive. They covered medication such as anti-depressants and anxiety tablets. It covered creams for our daughter who suffered terribly from eczema and medicine for our little boy who had reflux.
Each and every time we had to go through the figures, I would lose a little part of myself. The guilt and shame was immense. Nobody should be treated this way.
"Each and every time we had to go through the figures, I would lose a little part of myself."
It was quite some time after this that I learned our expenditure was well below the level of ISI living standards. Our babies were growing out of car seats and buggies and clothes and shoes. Each day I was having panic attacks, wondering how we would afford to get them what they needed.
I remember sitting on the oak stairs of the beautiful home we had built. I was thinking that I couldn’t even afford new shoes for my toddler. I couldn’t ask my family for help again. I could not stop crying. It broke me. It almost broke us as a family.
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The Effects of the Threat of Homelessness
This was the time that we needed financial and legal advice the most, but we couldn’t afford it. In 2013 after months of discussion, we knew we couldn’t go on like this anymore. My mental and physical health was at an all time low. The bank had asked us to consider selling the property for some time… we reluctantly agreed.
We had an offer which we accepted within a few months. A house also became available to rent that would allow us to bring our dog with us. We sold everything we had to afford six months rent and the fees needed to allow me to enter full time education.
I’ll never forget the last day in our home. Trying not to cry in front of my children. Trying to be brave when all I felt was that my world had fallen apart. We took a leap. It was a huge risk. We lost our home but we swore to each other that we would not go through all of this in vain.
"I’ll never forget the last day in our home. Trying not to cry in front of my children."
My story doesn’t end there. It has been a nightmare dealing with a Vulture Fund since we moved out, over four years ago. It still isn’t finalised but that story is for another day. However, there are thousands of people just like us who have already lost their homes.
"There were over 76,000 mortgages in arrears up to March 2017."
There were over 76,000 mortgages in arrears up to March 2017. This is according to the Central Bank, which means there are thousands more. All of these families will be unable to afford to house themselves and will have to present themselves as homeless, just as we did.
Solutions for Homelessness the Housing Crisis
In terms of mortgage arrears, we have to do much more to allow people to stay in their own homes. Currently the lender or vulture fund has the right to veto any proposals put forward by the borrower or a PIP (Personal Insolvency Practitioner). I believe this veto is too strong and more needs to be done to ensure that banks and funds accept reasonable proposals put to them.
Debt forgiveness is a subject that too many are afraid to talk about. It didn’t happen in our case and it seems to be dependent on the bank or fund. Instead of considering some debt write-off, our lender decided to sell our loan to a vulture fund. We have asked on several occasions to know how much they paid for our loan, they would never tell us.
Essentially, the bank would have taken a huge hit. Our house has now been sold and the vulture fund has already made a sizable profit on their investment. They still want our outstanding balance to be paid. This forces families, like ours, on limited incomes, to file for bankruptcy in the High Court. On top of that, we are currently reliant on the state to house us which does not come cheap.
"Our house has now been sold and the vulture fund has already made a sizable profit on their investment."
Could we do things differently?… YES.
If banks are willing to take a hit and sell our loans to vulture funds, why not offer the same deal to the borrower in the first place? I hear cries of moral hazard but I can tell you straight, it is very simple to figure out who is a genuinely distressed borrower from someone who is chancing their arm. Like anything else, proof of income and expenditure would be required to determine eligibility.
Why do we allow these funds, who pay so little tax, to trade off the back of our misery and continue to wreak havoc on ordinary families across Ireland?
The state refuses to offer any financial help to those in mortgage arrears. We used to have a payment called Mortgage Interest Supplement. This was provided to people to help cover the interest portion of their mortgage if they fell on hard times. This was abolished at the end of 2013 under austerity measures. This directly affects those facing homelessness.
Rent Allowance is a similar payment for tenants who for example lose their job or fall ill and is there to try and keep people in their rented accommodation. I don’t think anyone could argue that this isn’t the right thing to do. I would call on government to reintroduce MIS. Time limits could be placed and, similar to those on job seekers allowance, the state could ask borrowers to provide evidence that they are making reasonable efforts to improve their circumstances.
In my case, if we had been eligible for MIS, the interest portion of our loan would have meant a state payment to the lender of approx. €200 per month. When we lost our home and our money ran out, we had to apply for rent supplement, which cost the state €792 a month instead. This does not make sense.
"I would call on government to reintroduce Mortgage Interest Supplement to help those at risk of loosing their home."
There are many ways that the Government could help those in mortgage arrears or anyone struggling to pay their mortgage, in full and on time, month to month. The interest rates being charged are in many cases much higher in Ireland than in the rest of the EU.
I cannot understand why banks who have been bailed out by the taxpayer, are not under any real pressure to charge fairer rates. The political will does not exist currently to tackle this and other issues around homelessness.
Financial and legal advice should be made available to distressed borrowers much sooner than it is currently. There is now such a scheme but it is not normally offered until things get really bad and are possibly irreversible. Had we been able to access advice sooner, who knows what might have happened. We may have been able to keep our home.
We must never forget that we bailed out most of these banks. Our children and their children will be paying this dept for many years to come. That debt has been placed upon younger generations, many not even born when this horrendous mess was made. We have to ask why the banks have been allowed to operate as if they had done nothing wrong and without any penalty or expectation that they would be at the very least, fair with those in arrears or those who are hoping to get on the property ladder in the future.
"We must never forget that we bailed out most of these banks. Our children and their children will be paying this dept for many years to come."
Hundreds of families across Ireland are losing their homes each month. They are then placed on social housing lists, at the mercy of the private rental market to find a landlord that will accept HAP. Most of these cases are avoidable and are only adding to the numbers of homeless.
The Future - We Can & Must do Better
I joined the Social Democrats at the end of 2016. I did so because of my admiration for the people involved and the policies that they stand for. The Social Democrats are a new party with much work to do but for the first time, I could see a party that offers an alternative, that shared my values and outlook on life, that offers solutions, that offers hope.
I was appointed a Local Area Rep for Firhouse and Ballycullen in Dublin South West, just a few weeks ago in July 2017. The housing and homelessness crisis is clearly an important reason as to why I have become involved in politics. I am passionate about a great many other issues of course, but this one is the closest to my heart.
The housing crisis has continued to worsen and I am not prepared to allow others to go through what we have. I am not a ‘typical’ politician, a dirty word to almost everyone I know. I am an ordinary person who has experienced extraordinary events, the brunt of austerity, of right wing ideology. I am not alone. All I want is to help build a brighter, fairer future and a more equal society for our kids, for ourselves. That way, what we have experienced will not be in vain.
Carly Bailey, Social Democrat.