Tuesday 12 December 2017

Campaigner and AIB hatch €1bn plan to keep families in their homes

It is thought that the acquisition of the 3,000 distressed mortgages could cost as much as €700m. (stock image)
It is thought that the acquisition of the 3,000 distressed mortgages could cost as much as €700m. (stock image)
John Mulligan

John Mulligan

A €1bn plan that would help thousands of people facing the prospect of home repossession is being hammered out by mortgage campaigner David Hall and State-owned AIB.

Mr Hall confirmed he is working on a project with the bank that would see his Irish Mortgage Holders Organisation (IMHO) acquire as many as 2,000 homes from AIB.

Those homes are occupied by borrowers who would be currently eligible for the Government-backed mortgage-to-rent scheme, and who are at risk of losing their homes.

The IMHO would also acquire up to 3,000 distressed mortgages from AIB, which is gearing up for a stockmarket flotation this summer.

The IMHO is working in conjunction with the Housing Finance Agency to push through the plan, which has been worked on since last July. It is understood Housing Minister Simon Coveney has also been heavily involved.

Under the plan, AIB would agree to sell 2,000 homes to IMHO that would typically qualify for the mortgage-to-rent scheme.

Helping families: David Hall
Helping families: David Hall

That Government-backed scheme - launched in 2012 - permits people to stay in their homes if they surrender ownership of the property. Under its terms, home owners must agree that they can no longer afford to repay their mortgage now or in the future. It applies to homes under a certain valuation threshold. It was reported over the weekend that just two AIB customers have so far been approved for the scheme.

If the IMHO then acquires the distressed mortgages from AIB, the customers with those loans would be entitled to buy back the home at an agreed rate over a period of time.

The Irish Independent understands the first phase of the home acquisition plan would potentially see IMHO spend an initial €150m to acquire properties, with a second acquisition phase possibly costing another €150m.

It is thought that the acquisition of the 3,000 distressed mortgages could cost as much as €700m. The total €1bn of funding for the project would likely come from a consortium of international lenders.

Mr Hall declined to comment on the potential cost of the deal.

"I am working on a project to keep families in their homes and out of respect for all the stakeholders, given the negotiations are ongoing, I won't be able to make any comment," Mr Hall told the Irish Independent. "The project has significant potential for those facing repossession and I must not jeopardise that."

AIB also declined to comment on the plan.

Its chief executive, Bernard Byrne, last week urged the Government to pull the trigger on a stockmarket flotation of the bank by this summer rather than wait until the second half of the year. It is likely the Government will sell an initial 25pc stake in the lender for about €3bn.

Irish Independent

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