New measures will be announced next week to address the mortgage arrears crisis which will allow struggling borrowers remain in their homes through a variety of ways, Enda Kenny has confirmed.
His comments come after the Irish Examiner revealed earlier this week details of a new mortgage-to-rent scheme to allow those with long term arrears leave their debt behind but remain under their roofs.
Mr Kenny said the Coalition’s long-awaited plan to deal with distressed mortgages would have a particular focus for those with long- term arrears and would also include changes to how banks veto debt deals with those in debt.
“The Government has committed to bring forward a number of further solutions that will deal with the question of really distressed mortgages where the option can be had for another alternative in respect of those borrowers so that in the vast majority of cases the option will be there for families or tenants to remain in a house on foot of a variety of solutions,” he told the Dáil.
The Coalition’s proposals are expected to include a new mortgage-to-rent scheme to let owners give their home up to a bank, have their debt written off, but to be allowed remain under their roof as a social housing tenant.
Private investors are expected to be given the chance to buy the properties, which will then be rented to the original owner via local authorities. The proposals are also set to allow courts decide debt deals, where a veto by the banks with a debtor would be overruled.
A review of the three-year bankruptcy terms is also expected to be handed over to the Oireachtas Finance Committee, under the plans.
Fianna Fáil leader Micheál Martin yesterday said there had been 586 repossessions initiated since January, 383 of which related to homes. “Something must happen to change the status quo,” he said.
Mr Kenny said in many cases, repossession proceedings prompted borrowers to re-enter talks with lenders.
Meanwhile, Finance Minister Michael Noonan is expected to examine a Central Bank review by tomorrow of what costs banks face and what mortgage interest rates they actually apply.
Governor Patrick Honohan has already indicated to him that the margin of what banks charge for their variable rates as opposed to what its costs them to source funds is too high. Mr Noonan said he intends to confront bank bosses with the research and press them to reduce their variable rates, which are double what other eurozone borrowers pay.
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