Safeguarding the family home should be a political priority- Burke

“Safeguarding the family home should be a political priority”, says Fine Gael Cork North Central Senator, Colm Burke.

“I believe the time is now right to introduce strong legislation outlawing the practice of using the family home as collateral or charge against any other loan apart from the residential mortgage on the property itself.

“The banking and financial crisis which began in late 2007 brought huge hardship and suffering to many thousands of families and individuals. Many people were brought to the brink of despair due to the financial burdens caused by reckless lending and unwise borrowing. The banks and other financial institutions behind the reckless lending had a duty of care to borrowers and to their own organisations. They failed completely to exercise that duty of care in a responsible fashion.

“During the years of reckless, lending an unacceptable practice developed which should now be legislated against. In many cases the family home was used as collateral to facilitate additional loans. As a result of this practice many family homes have been put at risk. There is also strong evidence that the practice of using the family home as collateral has caused high levels of stress for many families. In some cases it may have been a contributory factor in some suicides.

“If a loan is not able to stand on its own two feet without putting the family home at risk then it is not a sensible loan and should not be issued. I believe the Central Bank should also put in place sensible regulations governing issues such as increasing the size of an existing mortgage on the family home and the practice of withdrawing equity from a home.”