Wednesday 19 September 2018

Home For Life opens doors to hard-put PTSB borrowers

Housing Minister Eoghan Murphy. Photo: Caroline Quinn
Housing Minister Eoghan Murphy. Photo: Caroline Quinn

Gretchen Friemann

Minister for Housing, Eoghan Murphy and Minister of State Damien English will officially approve another player in the mortgage-to-rent scheme today as the Government attempts to tackle an acute shortage of affordable homes.

Home for Life, an enterprise backed by property developers, Charles O'Reilly Hyland and Maximillian O'Reilly Hyland, as well as businessman Paul Cunningham, aims to assemble a €50m to €100m property portfolio from hard-pressed borrowers at Permanent TSB.

In February the bank agreed to partner with iCare Housing, a not-for-profit body set up by the debt campaigner David Hall, to help provide mortgage relief to its customers.

It is understood PTSB expects to shift between 500 and 700 homes linked to unsustainable mortgages into the scheme, in a move that will help reduce the bank's relatively high stack of non-performing loans.

However, the Government initiative requires borrowers to opt in to the scheme and it is open only to those that qualify for social housing.

Under the plan, a home-owner who faces an unsustainable debt burden, and possesses a household income that does not exceed €25,000 to €35,000, can enter the scheme and decide whether to apply to the iCare or Home for Life offer.

After surrendering the mortgage, the loan is cancelled and the property is transferred to the affordable housing entity.

PTSB assigns the home a current market valuation but sells it on at a slightly lower rate to reflect the costs of foreclosing on a distressed borrower.

iCare and Home for Life, which effectively operate identical models, take possession of the property and the rent is paid by the local authority.

It is understood KKR competed alongside Home for Life for authorisation to participate in the scheme.

However, the buyout firm, which had joined forces with its Australian-based subsidiary, Pepper Finance Corporation, appears to have stepped back from the race.

Home for Life was advised by Davy stockbrokers and is expected to strike deals with other lenders once it meets its targets with this initial portfolio.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business