The government has been urged to make the mortgage-to-rent scheme mandatory for all homeowners in long-term arrears in a bid to prevent mass homelessness.
Father Peter McVerry, one of the country’s most prominent housing campaigners, said that the scheme could help more than 32,000 people who have fallen behind on their mortgage payments by more than two years.
Speaking at the launch of the Peter McVerry Trust’s annual report, the charity’s founder said that one of the main problems with the government’s response to homelessness was “the failure to have any realistic measures to prevent further homelessness”.
“I believe the mortgage-to-rent scheme should be across the board,” he said. “At the moment it’s limited; your income has to be below a certain level, the value of your house has to be below a certain level.
“I would make that across the board and I would make it compulsory for all banks to take up the scheme.”
He also said that Irish banks would come under further pressure to repossess homes as house prices continued to increase. The European Central Bank has encouraged financial institutions to sell non-performing loans, including mortgages that were in long-term arrears at the end of last year.
Some 32,169 mortgage customers had been in arrears for at least 720 days at the end of June, a fall of 784, or 2.4 per cent, over the quarter. Borrowers in arrears for two years or more now account for just under 45 per cent of all those behind on their payments.
The scheme, which was launched in 2012, helps borrowers to stay in their homes by selling the property to an approved housing body, with the owners becoming tenants. It has been amended twice this year. One significant change allowed private investment funds to buy non-performing home loans at a discount before leasing properties back to the state for social housing.
AIB announced in September that it had reached an agreement with the Irish Mortgage Holders Association and iCare Housing, a not-for-profit housing body, that would result in the bank buying hundreds of homes from distressed borrowers, who would then rent the properties on a long-term basis as tenants of iCare.
