Mortgage debt crisis

Derry and the entire Northwest is suffering from an “epidemic” of mortgage problems, according to Derry Citizen’s Advice Bureau.

Money Advice Supervisor with CAB, Liam Doran, confirmed that since January their Waterloo Place office has been working with around 400 people facing having their house repossessed.

Mr. Doran said; “We meet at least ten or twelve people every week who contact us with severe mortgage arrears. Those people are already on their way to having their home repossessed.”

He said the amount of debt handled by the office has risen by 50% in each of the last three years and is still rising. The total amount of debt dealt with by Derry CAB in 2010 totalled £9.25m, compared with the £6.1m in the first five months of 2011.

“The downturn is hitting people really hard. We are talking about people and homes from each and every part of the city. In particular, though, those in bigger homes are being hit harder. The trend is that bigger houses are being repossessed as they’ve decreased in value by up to 50% in many cases - but the spectrum of house types affected is definitely widening.”

Mr Doran that people who’ve lost their home are also finding themselves in court for outstanding mortgage debt.

“When a bank repossesses a property on which repayments are behind, the drop in house prices means that the sale may not clear off the entire mortgage. That shortfall becomes unsecured and the recently evicted debter may be pursued through the courts.

“At that point filing for bankruptcy is quite common.”

Of the 839 clients visiting CAB so far in 2011, 400 have had issues surrounding home repossessions.

Mr Doran added that CAB fears the situation will worsen.

“Property prices are still on a downward trajectory and the cuts to mortage interest payment relief, introduced in October 2010, seem set to increase the immpact of repossessions across the North West.”

CAB may be contacted via lderrymoneyadvice@citizensadvice.co.uk or on (028) 71 370337.