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Just one family gets help from the State mortgage rescue plan

JUST one family has benefited from a Government-led mortgage scheme -- almost five months after it was launched.

The Department of the Environment has admitted that its mortgage-to-rent scheme has helped just one distressed mortgage holder since July.

The plan sees the ownership of the home transferred to a housing association, which then rents the property back to the family in question.

The scheme -- which was launched in June by Housing Minister Jan O'Sullivan -- is aimed at preventing distressed homeowners from being evicted by lenders.

Lenders

But the revelation that just a single family has successfully applied to the scheme has led to strong criticism by financial experts.

According to the figures, 517 people have applied for the scheme -- but almost 300 are stilling waiting for their files to be processed.

Some 48 distressed mortgage holders saw their applications rejected by a single lender, while 180 were deemed ineligible.

In a statement, a spokesman for the minister blamed the low take-up on the complexities involved in negotiations.

"These are complex legal transactions involving several parties -- homeowners, lenders, approved housing bodies, local authorities and solicitors," the spokesman added.

At the time of the scheme's launch, Cluid Housing Association predicted that it could prevent 3,500 people from being kicked out of their homes.

The figures revealed, however, mean that almost half of those who have applied for the scheme have been turned down outright.

Cluid's head of policy, Simon Brooke, blamed the numbers on the lack of backing given to the scheme by lenders.

"Some lenders seem to be not full square behind the scheme. That is a matter of concern to us," he said.

The Free Legal Advice Centre (FLAC) said the numbers show that the scheme has so far been a "failure".

"There's only been one successful applicant -- how can that be described but as a failure?" said FLAC senior policy adviser Paul Joyce.

In order to qualify for the mortgage-to-rent scheme, your local council must have approved you for social housing support and your lender must agree that you have no chance of ever clearing your mortgage.

Department officials are now expected to examine how they can encourage banks to show greater engagements with housing associations in order to boost participation in the scheme.

hnews@herald.ie


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