A DUBLIN family who were facing imminent eviction from their home have become the first mortgage holders to benefit from the Government’s new debt forgiveness scheme.
The scheme, announced last November on the recommendation of the Keane report on mortgage arrears, allows mortgage-holders who can no longer service their debts to surrender their properties but remain in their homes as social housing tenants.
The family in question were “particularly hard pressed” and had run out of options, receiving a last-minute reprieve before eviction, Minister of State for Housing Jan O’Sullivan said.
“Their mortgage position was clearly unsustainable and in the absence of an intervention like this their options would have been extremely limited.”
In this case the house has been bought by the housing association Cluid with a loan from the Housing Finance Agency and a grant from the Department of the Environment. However, as the scheme is extended, voluntary housing bodies will be able to access the loan element from the original mortgage lender.
Under a second version of the scheme the bank would become the owner of the property and the local authority within which the property was located would lease the property from the bank.
This model is not yet operational but in the long term is likely to be more widely used as it is anticipated that voluntary housing bodies would not be able to meet demand for the scheme.
Ms O’Sullivan said she was working with other Government departments to determine the likely number of eligible candidates for the schemes.
For the homeowner, both schemes will operate in the same way in that they will relinquish ownership claims to their property, the debt will be written off, and they will pay means-tested rent as social housing tenants.
To qualify, the householder must have had their mortgage position deemed unsustainable under their bank’s mortgage arrears resolution process and they must agree to the voluntary repossession of their home. They must be eligible for social housing and make an application to their local authority for social housing support.
The property must be valued at less than €220,000 and be “appropriate to household need”.
“I hope now we can work with other lenders on further testing the scheme in the short term before rolling it out nationally in the coming months,” added Ms O’Sullivan.
