STRUGGLING mortgage holders could have a reprieve if they run into financial difficulties and have access to a new state-backed mortgage scheme, if the Labour Party enter Government.
Home-owners would have their mortgage supported by a newly formed State agency if they ran into financial difficulties, which would ultimately prevent them from losing their home.
The so-called Principle Residence Ownership Plan (PROP), which is the brainchild of TD Ciaran Lynch, would continue to meet the payments if mortgage-holders were finding it difficult to meet their repayments.
And then an assessment would be carried out on rearranging the loan.
However, the planned agency would guarantee the mortgages only when the applicants had passed a strict screening process on their ability to repay loans, as well as their credit and employment history.
Mr Lynch said that the aim of the scheme was to prevent another property bubble.
"This will be achieved by a more stringent assessment of applicants, more prudent lending practices by banks and by an insurance structure that protects the homeowner and the lender," he explained.
And it would also benefit the State because the property must be within a price range set by the agency, thereby ruling out excessive lending.
The Labour party proposal outlines that banks could pool bundles of the State-guaranteed mortgages to create bonds that would be sold to investors on the international markets.
Labour is also proposing that a body called the National Home Mortgage Agency (NHMA) would operate between the mortgage holder and lending institutions to guarantee repayments.
Last week, Labour leader Eamon Gilmore predicted the party would win more than 50 seats in the next general election.
He said that the party was likely to run as many as 80 candidates in the election, some 15 more than the historically high figure of 65 candidates to which it had already committed.
Meanwhile, the Free Legal Advice Centre welcomed the State-backed mortgage plan, saying that it could give a "degree of certainty and security" to householders.
"An agency with the interest of keeping people in their homes would help sort out the repayment plan," said director Noeline Blackwell.