The new scheme, according to Respond, would primarily target those who have “experienced a sudden drop in income,” by providing them with the option to renegotiate their mortgage and/or defer up to seventy per cent of the interest on their monthly repayments.
According to Respond, “the Code of Practice recently put in place in Ireland does not go far enough to protect homeowners and that this scheme needs to be introduced now by government and lenders.”
John Hannigan, Respond! spokesperson said, “the banking institutions should offer this assistance to homeowners as their risk has already been secured through Government Guarantee Schemes and the Bank Recapitalisation Scheme.”
“The Homeowners Mortgage Support Scheme would offer assistance to homeowners who have experienced a recent drop in income or become unemployed,” claimed Mr Hannigan. He noted that the people, who would avail of this scheme, could possibly defer up to seventy per cent of the interest of their monthly mortgage repayments for a period not greater than two years. He pointed out that a similar arrangement was recently agreed in Britain and that the Bank of Ireland’s British arm supported it there.
It should be noted that this suggested arrangement would be a method of deferring payments, not cancelling them. Respond also proposed that those “given excessive mortgages that far exceeded their income should be allowed renegotiate their mortgage to a suitable level appropriate to their current income.” It is not clear if this scheme would include those who have obtained fixed rate terms that incur “breakage” fees.
Respond were adamant that “A lot of people were victims of “reckless lending” on the part of our financial institutions and it is unjust that banks have failed to pass the benefit of recent government guarantees onto struggling Irish families.”
Respond noted that with the increase in repossession cases being heard on a weekly basis in the High Court, the government needs to act now and help Irish families. The housing charity claims that current mortgage moratorium does little to help homeowners - “it simply delays the inevitable by allowing arrears to accumulate for twelve months.”
“Every one has a right to a home and this Mortgage Support Scheme is the only way the government can deliver this to the Irish people” concluded Mr Hannigan.
The Irish Times recently published an article on the increase in repossession proceedings where Mr Justice Brian McGovern was quoted as saying “I sometimes wish developers and bankers would sit in here for a few hours on Monday mornings and see the real effects of property inflation on ordinary people and the effects of large loans on modest houses.”
Respond was established in 1982 and is Ireland’s largest non-profit Housing Association that currently employs more than 350 people across the organisation in a variety of departments.
Respond will be holding a conference entitled, “Is Combating Poverty a Dead Agenda?” on May 7th in the Osprey Hotel, Naas, Co Kildare. The event will be chaired by Eddie Hobbs and those speaking include Minister for Housing Michael Finneran, Minister for Communications, Energy and Natural Resources, Eamon Ryan, Noeline Blackwell (FLAC) and John Mark McCafferty (Saint Vincent de Paul).
