Parents unable to meet their full mortgage payments should be able to pass debt on to their children - charity
Published 02/02/2016 | 16:46
PARENTS who are unable to meet their full mortgage payments should be able to pass on the responsibility of repaying it to their children, a charity that works with the over-indebted has recommended.
So-called intergenerational mortgages are used in other countries to help families overcome borrowings they are unable to pay off in 20 to 30 years.
It is one of the solutions nationwide debt charity the Phoenix Project wants to see introduced to help those in chronic mortgage arrears.
Portlaoise-based Phoenix claimed that up to 50,000 families face losing their homes to repossession over the next one to two years.
This would result in 120,000 more people being made homeless, the charity said. This is based on an average of 2.5 occupants per home.
Phoenix wants the term of mortgages where people are unable to meet the agreed payments to be stretched out by another couple of decades.
Chairman of the Phoenix Project John McGrath said: “In Scandinavian countries there are such things as lifetime mortgages, generational mortgages, where someone can have the mortgage going on past their passing, and where their son or daughter or whatever would take up the mortgage and sell the property and/or clear off the mortgage.”
The charity, that provides free advice and help to borrowers with mortgage arrears, said almost third of those offered a mortgage restructure by their lenders were lapsing back into financial trouble.
Mr McGrath said: “The solutions that the banks and financial institutions have offered many borrowers will result in the repossession of some 49,000 family homes.
“This is simply unacceptable and will make tens of thousands of families homeless.
“Any increase in interest rates will result in even more borrowers being forced into having their homes repossessed.”
The charity says that, since its inception in 2008, it has negotiated agreements on behalf of some 18,000 borrowers to stay in their homes.
The group, which is funded by two unnamed donors, said 60pc of its clients last year were separated women, or those about to separate. They typically report that financial difficulties are the main reason for separation.
Meanwhile, a total of 1,135 possession orders were made by the Irish courts in the first nine months of 2015, according to figures compiled by law firm Arthur Cox.
This is an increase of almost 70pc on the same period in 2014, and a 350pc increase on the same period in 2013.
The law firm said that while the number of possession orders made by the courts has risen, the number of residential mortgages in arrears has significantly reduced.