Mica homeowners urged to contact Central Bank over ‘national disgrace’

Defective blocks homeowners are being urged to write to the Central Bank to raise concerns that they may be at risk of defaulting on their mortgages if they have their property demolished under the State’s redress scheme.

Research by a group of affected homeowners has revealed that mortgage holders who have their homes demolished under standard mortgage terms and conditions issued by lenders risk being asked to repay their outstanding mortgage in full.

The Banks and Insurance Focus Group, which is part of the Redress Focus Groups that was formed by affected homeowners in Donegal earlier this year, has described the situation that thousands of homeowners could find themselves in as a “massive national disgrace”.

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A public meeting of the group has heard that standard mortgage terms state that if a property is demolished,  the total debt shall be immediately payable to the bank.

“The reality is thousands of mortgages totalling hundreds of millions” would be “in a technical and legally enforceable default,” a spokesman for the Banks and Insurance Focus Group said at a recent meeting in Burt.

While housing minister Darragh O’Brien is understood to have written to Insurance Ireland and the Banking and Payments Federation (BPFI) on the matter, the group feels the Government has left affected homeowners exposed.

“In relation to consumer protection, nothing has been done,” the spokesman said.

“It hasn't been acknowledged and the remediation scheme is actually asking for bank consent for demolition. So it is actually guiding people towards demolition and direct default of their mortgage without tying the bank in where the bank is saying the demolition itself is a default. This is a massive dereliction of duty by the minister and by the banks as a collective.”

Homeowners have now been invited to meet Brian Hayes, the CEO of the Banking and Payments Federation Ireland (BPFI) and representatives of the major lenders to discuss the issue.

The spokesman said that “it is not a panic situation” and “not something people should lose sleep over”.

“Our group is saying people should not be alarmed about it but we would urge people to contact the Central Bank’s consumer protection line and ask the Central Bank to take action as a matter of urgency.”