Housing Charity proposes support scheme for those facing repossession

Ireland’s leading housing charity contends more needs to be done to help those in mortgage arrears who face losing their homes. The call comes before the Joint Oireachtas Committee on Finance and the Public Service as Respond! Housing Association presents their Homeowners Mortgage Support Scheme. The aim of the scheme is to assist those struggling to repay a mortgage that exceeds the value of their home.

According to Aoife Walsh, Respond! spokesperson, the scheme is needed for the 25,000 families currently in mortgage arrears who may face the possible repossession of their home when the mortgage moratorium expires in February 2010.
“The number of families in mortgage arrears has almost doubled in the past year. While endless supports are being offered to our financial institutions, the same cannot be said of those who facing losing homes partly due to the reckless lending of the very same institutions. We are calling on the Government to adopt this Homeowners Mortgage Support Scheme that will reduce monthly mortgage repayments for families that are struggling due to recent unemployment or a significant reduction in income.”

Respond! proposes that families can renegotiate with their lender the value of their mortgage to the current market value of the property. The objective is to provide people who have shown a commitment to repay their mortgage the opportunity to get a new mortgage with payments that are affordable today and sustainable over the lifetime of the mortgage.

“In the past 13 years, we have witnessed massive increases in personal indebtedness from 58% of disposable income in 1996; to 100% in 2003; to an alarming 175% in 2007. The provision of long-term mortgages, 100% financing and looser income/loan ratios are some of the reasons for this” added Ms Walsh. “The consequences of families losing their homes are both financial and social and would be to the detriment of Irish society. The Homeowners Mortgage Support Scheme has one aim; reduce the amount homeowners owe per month to a sustainable level. The scheme brings together borrowers, lenders and the Government so that all stakeholders share in the cost of ensuring that homeowners can afford their monthly mortgage payments and ultimately stay in their home.”

The scheme would offer assistance to those who have experienced a recent drop in income or become unemployed as a result of the economic downturn. Respond! presented the details of the scheme to the Joint Oireachtas Committee on Finance and the Public Service and the scheme includes the establishment of an Independent Arbitration Committee to oversee its operation. This committee would consist of a member of the legal profession, a banking professional and a consumer advocate.