Hayes urges Government to act on tracker mortgage issue

Brian Hayes MEP today (Thursday) urged the Government to work with the ECB in getting the tracker mortgage issue resolved following this afternoon’s ECB Governing Council meeting where details of the ECB’s Asset Backed Securities programme were revealed.

“The ECB said today that it will begin purchasing Asset Backed Securities in the fourth quarter of 2014 over 2 years to boost inflation and economic growth in the euro area. This programme will allow for the purchase of guaranteed mezzanine tranches of securities which could include tracker mortgages.

“Mario Draghi informed me in the European Parliament two weeks ago that the ECB may be open to the purchasing of tracker mortgages under the ABS programme but they would need some guarantee.

“If the Government can act quickly to make the case for tracker mortgages to be included in the ABS programme possibly through a state guarantee, it could be an incredible boost to the Irish economy.

“The exposure of tracker mortgages, representing almost two thirds of the total number of residential mortgages, is holding back the profitability of Irish banks and the potential for lending into the real economy. Bank of Ireland, AIB and Permanent TSB have just under €50bn of tracker mortgages sitting on their balance sheets. These mortgages track the main ECB interest rate which is at a record low of 0.05%.

“We need the help of the ECB to constructively engage with our Government in trying to find a solution to the tracker problem. The reduction in the ECB interest rate is good news for Irish mortgage holders. But the problem of over-exposure of Irish banks to tracker mortgage needs to be solved.”