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Broker says lenders are using wage subsidy scheme to refuse mortgages

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Blocked: Would-be home owners are having their dreams dashed by lenders who are using the State wage subsidy scheme to refuse mortgages, claims a broker

Blocked: Would-be home owners are having their dreams dashed by lenders who are using the State wage subsidy scheme to refuse mortgages, claims a broker

Blocked: Would-be home owners are having their dreams dashed by lenders who are using the State wage subsidy scheme to refuse mortgages, claims a broker

Lenders have been accused of using the State wage subsidy scheme to “blackball” mortgage applicants.

It comes after it emerged that lenders are now turning down mortgage applications from people who are not on the subsidy scheme but their employer is availing of it.

In some cases those applying for a mortgage were not even aware their employer was subsidising wages of colleagues under the scheme.

The lenders have been accused of assuming that any company availing of the Employment Wage Subsidy Scheme (EWSS) is about to fail. This is despite the fact that some of the largest employers in the country are using it.

Most lenders deny blocking home loans due to the subsidy scheme.

But some of them have been accused of refusing to allow people to even complete a loan application if the employer is using the scheme, even though the employee’s wages are not being supported by the EWSS, according to mortgage broker Michael Dowling of Dowling Financial.

Finance Minister Paschal Donohoe said last summer that “participation in the wage subsidy scheme should not be a reason for treating an applicant in a different way”.

Some 309,000 employees are having their wages subsidised by the EWSS scheme, with close to 40,000 employers using it.

Revenue publishes a list of companies using the scheme.

Mr Dowling said: “Every lender is now refusing applications from people whose employer is using the EWSS scheme, even when they themselves are not on it. Absolutely every one of the banks. If the employer is using it there is an automatic assumption the company is going to fail. It is very unfair.”

He said lenders were not just pulling out of mortgage deals at the point of drawdown but were not even allowing those whose company is on the scheme to complete an application.

Labour finance spokesman Ged Nash said: “I have been dealing with cases in the last few weeks where all the evidence suggests that lenders are now using Revenue’s EWSS list to blackball applicants who work with firms who are on the scheme.”

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Banks denied they were blacklisting people on the scheme or if an applicant’s employer was it.

AIB said it assesses each applicant on a case-by-case basis.

Permanent TSB said it “is facilitating mortgage drawdowns for customers on the EWSS, or where their employer is in receipt of EWSS, subject to their employers providing assurance on the sustainability of their income when the EWSS comes to an end”.

Ulster Bank insisted it was supporting “customers where one or both applicants are in receipt of the Covid-19 wage subsidy scheme”.

Bank of Ireland said it looks at whether or not an employee’s income was supplemented by the Temporary Wage Subsidy Scheme. It includes Covid-19 clauses in all mortgage agreements, but it denied seeking financial information related to an employer as part of a mortgage application.

KBC said it did not have a policy of restricting mortgage lending and each application is assessed on a case-by-case basis.


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