Groups to buy struggling owners' homes and rent them back
Two groups are set to buy distressed mortgages from banks and rent them back to those no longer able to make home-loan repayments.
Those who qualify and agree to the scheme could see their mortgage debts wiped out.
The homes would be leased to local authorities, with the owners becoming renters.
It comes after changes to the State's mortgage-to-rent scheme that now allows bulk-buying of mortgages to be rented back to those in deep arrears.
Some 34,000 mortgages are more than two years in arrears, with a serious risk of these houses being repossessed.
A group of businessmen with international financial backing, called Arizun, said they had up to €500m and could buy thousands of distressed mortgages.
Mortgage campaigner David Hall's ICare group is also preparing to buy up mortgages that are in arrears.
The funds are lining up to buy mortgages that are in long-term arrears from banks following changes to the State's mortgage-to-rent scheme.
This is where a homeowner who is no longer able to meet the repayments consents to the property being sold to a housing agency. The property is leased to a local authority, and a family can rent it if they qualify for social housing.
Changes to the mortgage-to-rent scheme will mean funds will now be able to bulk-buy distressed mortgages, and gain control of the properties.
Arizun's chief executive Cathal O'Leary said the homeowners in arrears would have their outstanding mortgage debt cancelled. They would have the option to buy back the property at a later date, and would have a 40pc share in any rise in the property's valuation.
Asked if Arizun was not just another vulture fund, Mr O'Leary said: "We are writing off the entire mortgage debt. I don't know any fund prepared to do that, and we are providing a 20-year solution."
He said his fund could buy up to 5,000 distressed mortgages. A private lease arrangement could be arrived at for those who do not qualify for social housing.
Mr Hall's ICare has been approved as a housing body by the Department of Environment and Housing, it is understood.
It is poised to borrow €100m, and buy up to 2,500 mortgages that are in default. Homeowners will have the option to buy back the property in the future.