Fine Gael European Affairs Spokesperson Michael Creed has called on the Government to protect those in difficulty with sub-prime mortgages by ensuring they’re interest rates are brought in line with those on more competitive established bank rates. Speaking during a debate on the recent European Council, Deputy Creed said;
“We have a serious problem, namely, a European banking crisis which will manifest nationally. Now that the big issues such as cleansing of developer loan books and recapitalisation of the banks have been dealt, the banks will go after Joe and Joan in terms of their mortgage, which is the real problem for 2011. The State needs to get its act together and to assist in an innovative way people with mortgages, in particular those on sub-prime mortgages, getting onto high street variable rates”.
“Europe has a banking crisis. It has not gone away. Irish and other banks here were recently stress tested. We now find those stress tests were not worth the paper they were written on and there are to be new stress tests. There is a beginning of a realisation that this problem is only in its infancy. It is a much bigger problem than Europe has been prepared to confront to date. The public manifestations of this in, for example, a country like Ireland will become apparent in 2011 when the moratorium on mortgages expires and the 35,000 people in mortgage arrears of more than three months and the 12,000 people who have made no payments for more than 12 months will be in the firing line. That is the reality of the banking crisis facing Europe”.