THREE out of every five applicants for the Government's mortgage-to-rent scheme have loans with two subprime mortgage firms, new figures show.
The scheme was launched in June 2012 and targets low-income families whose mortgage situation is unsustainable and where there is little or no prospect of a significant change in circumstances in the foreseeable future.
The scheme ensures that the family remains in their home, while ownership is transferred to an approved housing body, which in turn rents it to the original owners.
New figures show that loans held by subprime lenders, the Pepper Group (formerly GE Capital Woodchester Home Loans Ltd) and Start Mortgages account for 430 or 59pc of the 726 applications from mortgage holders to participate in the scheme.
Figures provided by Housing Minister Jan O'Sullivan in response to a Dail question by Labour's Ciaran Lynch show that mortgage loans owned by the Pepper Group account for 38pc or 276 of the total with Start Mortgages making up 21pc or 154 of the total.
The figures show that of the 276 applications before the Pepper Group, 93 or 46pc have been approved for the scheme with 21pc of the Start Mortgages approved.
The figures show that the number of applications for the mortgage-to-rent scheme relating to AIB mortgages totalled 29, or 4pc of the overall total, with applications on 64 Bank of Ireland mortgages accounting for 9pc of the 726 applications.
Chairman of the Oireachtas Finance Committee, Mr Lynch said: "The issue of the subprime lenders issuing mortgages was questionable from the outset."
However, Mr Lynch said that the level of approval relating to the subprime mortgage loans "shows that the chickens have come home to roost for them and they are prepared to suffer the loss by having the loans approved for the scheme and that there is an acceptance from them of the current property market".