Calls to adopt ‘NAMA for the people’ initiative

THE Government has been urged to take a stake in the mounting mortgages being carried by ten of thousands of debt-ridden borrowers in a “NAMA for the people” style initiative.

Housing agency Threshold will in the coming days make its pre-budget submission to the Government which will focus on mortgage arrears and home repossessions.

Responding to a High Court case this week where a Tipperary couple were forced to give up their home, the agency called for an end to “cosmetic” measures being used to bail out borrowers.

Instead of short-term measures like payment moratoriums, Threshold wants the Government to consider buying up homes and mortgages with arrears from banks, particularly subprime lenders. Chairwoman Aideen Hayden explained: “We believe that the Government are going to have to be more hands-on in this situation. These are not just cosmetic answers, holding off for a year or two or lengthening the length of the mortgage. It’s not going to stop the underlying problem.”

Threshold wants a scheme to “staircase” struggling borrowers out of unmanageable home ownerships.

This would involve a situation where the state would buy bad mortgages in arrears from lenders at a discount. The state might then take a 50% stake in the home while the original owner would take on the other part of the remaining debt and be allowed remain there.

“The state would take part of it [the mortgage] but not the entire risk and then if the market improves, the Government would gain from the uplift. They should take the NAMA approach for the people. Lenders want to realise some assets and know they can’t get the full amount now,” added Ms Hayden.

Meanwhile, a Tipperary couple who this week lost their fight to keep their home in the High Court yesterday explained how their lender had hassled the family to repay their debts. Patricia and John Burnett had their home repossessed by lender GE Capital Woodchester, facing arrears of nearly €32,000 from an original mortgage on the house taken out for €169,000. Husband John had lost his job as a truck driver.

Ms Burnett told RTÉ: “They were horrendous to deal with because they were ringing at least up until nine o’clock at night, asking the same questions ‘when would we get our money’ and you would say ‘I haven’t got anything to give to you’.”