Call for new mortgage support scheme

Cash-strapped homeowners should be allowed to defer or renegotiate their mortgage payments to help get through the recession, it was claimed today.

Social housing provider Respond! said a new mortgage support scheme should be rolled out for those who have lost their jobs or suffered a drop in income.

The body said the Government must urgently act to remove the culture of fear from families as around 50 repossessions were being heard weekly in the courts.

John Hannigan, spokesman, said: “The Homeowners Mortgage Support Scheme would offer assistance to homeowners who have experienced a recent drop in income or become unemployed.

“For these people we are proposing that they can defer up to 70% of the interest of their monthly mortgage repayments for no more than two years, similar to the arrangement recently agreed in Britain.

“This is simply a method of deferring payment, not cancelling it.”

Mr Hannigan said those who took out mortgages that far exceeded their income should also be allowed to renegotiate payments as they had fallen victim to ’reckless lending’.

The scheme would only apply to owner occupiers whose outstanding mortgage does not exceed €500,000 and not to those who own more than one property.

Under the terms of the Government’s seven billion euro recapitalisation plan for AIB and Bank of Ireland a 12-month moratorium must be placed on house repossessions.

But Respond! claimed this does not help the matter as it simple delays the inevitable.

“This Homeowners Mortgage Support Scheme is essential following the recent Budget,” Mr Hannigan added.

“Even those individuals fortunate enough to still be in employment will experience a dramatic loss in earnings from May 1.

“It is only in the coming months will we know the real extent of this recession on Irish families and this Government needs to act now to protect them.”

The scheme will be one of the key topics discussed at the group’s conference on May 7 in Naas, Co Kildare, attended by Housing Minister Michael Finneran.

Respond! is the country’s largest not for profit housing association.


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