Wednesday 16 October 2019

New mortgage-to-rent scheme launched in bid to stop distressed mortgage holders being taken over by vulture funds

Homeoptions aims to keep families with distressed mortgages in a home
Pictured were Erskine Holmes, OBE, Chairperson and Brian Reilly
Picture Jason Clarke
Homeoptions aims to keep families with distressed mortgages in a home Pictured were Erskine Holmes, OBE, Chairperson and Brian Reilly Picture Jason Clarke
Charlie Weston

Charlie Weston

A NEW mortgage-to-rent scheme has been launched with the aim of buying up homes of distressed mortgage holders to stop them being taken over by vulture funds.

It describes itself as a not-for-profit company offering an alternative to the sale of banks’ distressed mortgage books to vulture funds, and is set to operate on an all-Ireland basis.

Homeoptions says it has raised funds from the private sector, but would not name the funders.

They were mainly “ethical funds” which could include pension funds from the US and Europe, according to Homeoptions founder Brian Reilly.

It is headed up by former Merrill Lynch, Bank of Ireland and Kenney Wilson executive Ben Hoey.

Its chairperson is chief executive and founder of the Northern Ireland Federation of Housing Associations Erskine Holmes.

Mortgage holders who qualify will have to sell their home to the fund, but will have their debts written off, will rent back the property from Homeoptions.

It is not restricted to those who qualify for social welfare, unlike the State mortgage-to-rent schemes.

However, Homeoptions warned that it will be forced to take action against householders whose mortgages it has bought if they fail to engage with it.

“This will only happen following board approval and after comprehensive procedures have been fully implemented,” it said.

Brian Reilly of Homeoptions claimed it has the capacity to handle the 28,000 mortgage accounts that are more than two years in arrears.

Any profits will be invested back into further loan purchases as well as an affordable housing programme for young people.

The funding and asset management services will be provided by Irish firm Quartech Solutions, which is a company with a background in managing large loan portfolios, Mr Reilly said.

The new operator will only offer what it calls a mortgage-to-rent-repurchase structure.

Unlike a vulture fund that buys a mortgage it will not offer options such as capitalisation of arrears, split mortgages or voluntary surrender with a write-off of residual debt.

Mr Reilly said Homeoptions has been founded by people who are actively engaged in the issues relating to keeping people in their homes in Ireland.

Other directors of Homeoptions include businessman Mr Reilly, a Malahide businessman and a board member of broadband provider Magnet Networks. Another director is solicitor Julie Sadlier, a legal adviser to groups working with people who have unsustainable debt.

Its launch was welcomed by homeless campaigner Fr Peter McVerry and Master of the High Court Edmund Honohan.

Other players in the mortgage-to-rent area include housing charities ICare, Tuath Housing, Cluid Housing and Home For Life.

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