Wednesday 24 April 2019

Distressed mortgage holders: help is at hand

Mortgage-to-rent help homeowners struggling with mortgage arrears

Maria Herlihy

No distressed mortgage holder in Cork who is eligible for the Government's mortgage to rent scheme should lose their home.

That is the view of Home for Life (HFL) CEO Paul Cunningham.  Changes from the original scheme's eligibility criteria now means that an estimated 14,000 home-dwellers in mortgage arrears nationwide qualify for inclusion under the scheme, Mr Cunningham said.  

Figures from the Central Bank's Long-Term Mortgage Arrears in Ireland Report, from the third quarter of 2018, stated that 2,165 households in Cork have been in mortgage arrears for over two years, while over 1,667 of those have been in arrears for at least five years.

"Thousands of people in serious arrears have suffered years of anxiety and isolation, but there is a new reality which now concentrates on finding a solution in almost every case," he said. 

"We have encountered widespread distress among homeowners, many of whom believe they have failed their families because they couldn't keep up payments. 

"Unfortunately, many cases involve people in extreme stress simply because no one had told them there was another way out of what seemed to be an impossible malaise.

"The Government has recognised that there needs to be a genuine alternative for people who have been unable to pay their mortgage for at least two years, and the mortgage-to-rent scheme is totally focussed on keeping families in their homes," he said. 

He said that this scheme deals with a person's debt and keeps a family in their home with the prospect of buying it back in the event of financial circumstances changing. 

"I firmly believe that no one who is eligible for mortgage-to-rent needs to lose their home," Mr Cunningham said. "Every side wants a solution, and the government has ring-fenced finances this year to cover mortgage to rent, as well as changing the criteria to bring more people into the scheme," he said. 

He outlined that if a person has been rejected for mortgage-to-rent in the past three or four years, the changes to the scheme since then could mean that a person is now in the eligibility bracket. 

"There is a big window of opportunity, but it can only happen when householders get in touch with their banks or lenders to initiate the process. The rule of thumb is that there is a solution for everybody in mortgage distress," he said.

He went on to say that if a person doesn't qualify, then the Insolvency Service of Ireland offer ways to resolve a person's problems. 

"In my experience, lenders don't want to instigate court proceedings - they want to do a deal and move on. 

"Such deals include local authorities taking over a house on a confidential basis, which means no one need ever know there has been a switch to renting," he said.