Lenders ‘still in denial about scale of mortgage crisis’

SENIOR members of Government fear that some of the banks involved in the tracker mortgage scandal are still ‘in denial’ about the scale of the crisis, the Irish Daily Mail can reveal.

While the main banks are today expected to commit to providing compensation to affected homeowners by the end of the year, senior sources say certain banks may still be in denial about how many more people are affected, and how to deal with them.

Finance Minister Paschal Donohoe will address the Dáil tonight, following his meetings with the five main banks, about his plans to ensure the almost 30,000 homeowners affected are properly redressed. All of the main lenders are also due to make individual statements today.

However, sources say that the fact that some banks are co-operating, while others are dragging their feet, means that it is unlikely that there will be any blanket action or collective punishment.

It comes after Mr Donohoe yesterday said he was not satisfied with the responses of the various banks to the crisis to date. Much focus has centred on Bank of Ireland and KBC, who are the furthest behind in compensating their affected customers.

Meanwhile, the Government is to accede to a Fianna Fáil motion on the tracker issue which will be raised in the Dáil tonight.

That motion states that there should be no approval of salary increases or bonuses at the next AGM of any bank the State has shares in if the bank has not provided redress by Christmas.

It will also call for a halt on repossession proceedings in cases related to the tracker investigations.

Fianna Fáil finance spokesman Michael McGrath yesterday said at least 100 homes had been repossessed as a direct result of the actions of the banks, and that this had to stop until the investigation is complete.

Mr McGrath said he did not accept that ‘it is a coincidence that they [banks] all made the same mistake’.

‘I’m not alleging that there was collusion between the institutions, but I think within each individual institution they certainly arrived at a view that it was in their financial interest to deny customers their contractual rights,’ he said.

He added that gardaí ‘should be examining the evidence on an ongoing basis’.