Sligo Borough Council has called on the Minister for Finance to introduce a NAMA style scheme for householders facing serious mortgage arrears.

Proposing the motion, Clr. Matt Lyons, said such a scheme should also include a provision for writing off or forgiving borrowers a portion of their home loans to bring them more in line with current market values of their homes.

Welcoming the initiative taken by a local group who produced proposals asking the Minister for Finance to prevent unwarranted repossessions of family homes by financial institutions, Clr. Tony McLoughlin said banks had given out loans left, right and centre in the boom years and were now chasing those same people and threatening to put them out of their homes.

"Banks are being bailed out every day of the week, and now they're going after the most vulnerable people in the community. People are out of their minds and depressed as a result of this stress. It's not acceptable," he declared.

Clr. David Cawley recalled meeting a young woman during last year's election canvass who was distraught over her financial problems. Her bank would not even talk to her, having suckered her into a deal.

"A small number of people have become very rich at the expense of a whole generation," he said. "It's greed gone mad."

According to Clr. Lyons, the problems facing mortgage holders were getting worse by the day. People were under extreme stress, with many being driven into hospitals suffering from depression.

Mortgage moratoriums, he maintained, were not the answer as they were only postponing the evil day.

Noting that Irish mortgage holders carried the largest debt in the world, Clr. Lyons said 44,000 householders in the country were in serious arrears. He proposed that the council call on the Minister for Finance to introduce a NAMA style scheme for all households facing serious mortgage arrears.

The scheme, he said, should include a provision for writing off or forgiving borrowers a slice of their home loans to bring them more in line with current market values of their homes.

Clr. Veronica Cawley said that a time when people were losing jobs and suffered reduced wages, the financial stress facing families had never been greater.

"The banks encouraged this. They gave money out for everything, and now we are all paying a high price for what they did. People are trying to leave this country as fast as they can, and you can't blame them. There's nothing here only a stupid government.

Supporting the motion, Clr. Declan Bree said that for the last 15 years, the government had been bailing out banks, developers and speculators, while at the same time more than 40,000 people were being threatened with the repossession of their homes.

Mayor, Clr. Jim McGarry was critical of the fact that even where banks granted moratoriums they charged high interest, so people were effectively finding themselves deeper in debt, making a bad situation worse.

In those circumstances, it was reasonable to expect the government to introduce some relief scheme. The government had bailed out the big fish while the ordinary people continued to suffer.

People who were referred by lending institutions to the Credit Bureau could find themselves unable to raise even a small loan in future to educate their children. This was a a scandalous situation, the Mayor added.