Monday 23 April 2018

'This really is a kick in the teeth for people who have struggled to pay their mortgage'

Consumer expert slams new scheme to allow those who can't pay their mortgage stay in their homes - as renters

Brendan Burgess Picture: Steve Humphreys
Brendan Burgess Picture: Steve Humphreys Newsdesk Newsdesk

Consumer expert Brendan Burgess has slammed a new scheme that will allow those who can't pay their mortgage stay in their homes - as renters.

The Irish Independent today revealed that mortgage campaigner David Hall has done a deal with AIB to buy out hundreds of homes where the owners are in arrears.

They will then be rented to the families that previously owned them. It is the first time such a large scale scheme has been tried in the country and it has government backing.

It is understood that funding of up to €100m for Mr Hall's iCare Housing organisation is set to be provided by the bank for an initial phase of the scheme.

However Brendan Burgess, a consumer expert with, has criticised the move saying it is unfair to those who have paid their mortgages to date.

He told Newstalk Breakfast: "If you're one of the borrowers who hasn't been paying your mortgage for some time you'll be delighted to hear this.

"You are going to keep your house, you are going to have your debt written off. You are going to have the local authority paying the rent on your behalf. Why wouldn't you be happy?"

He added: "However, if you are one of the much larger group of people who have been struggling with their mortgage for years but have been paying it - you have probably cancelled your holidays, cancelled your health insurance, you've probably told your children 'no you can't have piano lessons'. And you're paying AIB and the other banks in Ireland one of the highest mortgage rates because not only are you paying your mortgage, you are paying the mortgage of people who don't pay.

"This really is a kick in the teeth for people who have really tried and struggled to pay their mortgage."

He argued that the "main reason" we have a "mess" in this country is that homes are not repossessed more frequently.

"If someone doesn't pay their mortgage they get six months after that their house is repossessed and they move on.

"In this country we don't allow banks to repossess houses and as a result of that people think: ''There is no need to pay my mortgage and I will go and live my life and spend my money how I like and the bank can do nothing about it. Now if it really gets out of control the government will step in and buy it back for social housing.'"

Asked by host Paul Williams if the people who are going to benefit from this deal are those who "can pay but won't pay", Mr Burgess responded: "I'm saying there is a good proportion of them in there."

He admitted some of those in arrears are legitimate cases.

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