Committee criticises mortgage aid scheme
THE state system for assisting mortgage holders who are in arrears needs to be radically overhauled, an Oireachtas committee is to recommend to the Government.
The Mortgage Interest Supplement provides short-term support to help people pay mortgage interest repayments.
Cash-strapped homeowners get assistance with the interest portion only of their mortgage repayments.
But the joint Oireachtas committee on social and family affairs has concluded that the scheme is not working properly, the Irish Independent has learnt.
The operation of the Mortgage Interest Supplement scheme is being reviewed by the Department of Social and Family Affairs.
Part of the review is set to look at why there is no reliable data on the numbers of people applying for help under the scheme. The only figures available are the numbers eventually granted aid.
Figures obtained by this newspaper at the end of last year indicated that more than 1,000 homeowners a month were being turned down for the mortgage support.
The Oireachtas committee's report, penned by Fianna Fail TD Thomas Byrne and Fine Gael TD Olwyn Enright, recommends that the reasons for approval or refusal should be collated, while the numbers applying should be recorded.
"There are a number of serious difficulties with the way in which the scheme is operated at present," the committee's unpublished report says.
The report points out that there is no uniformity in the way the scheme is administered. Claimants are turned down for the support if it is considered they overpaid for their home, or the mortgage they took out was too expensive for them.
The report points out that a two-income couple may have been able to afford a big mortgage during the boom, but if one of them loses their job, they will no longer be able to meet the mortgage repayments.
The rules state that a homeowner will not get the Mortgage Interest Supplement if either the owner or his or her spouse or partner works more than 29 hours a week.
In this circumstance, they will not be eligible for the supplement because there is still one income coming into the home, the Oireachtas report says.
The report condemns the fact that the decision on whether or not a homeowner took out a mortgage that is too expensive for them is at the discretion of the community welfare officer assessing the application.
About 15,000 people are receiving the Mortgage Interest Supplement.
The report also recommends that lenders and/or the State should be forced to take a stake in a home where a borrower is unable to meet repayments.