Seanad looks to Scotland for inspiration on mortgage changes
Labour senators intend to discuss the issue of mortgage arrears in private members time in the Seanad this evening and are looking at the Scottish model as an example for Ireland to follow.
Recent Central Bank data on arrears and repossessions show that mortgage accounts in arrears over 90 days have almost doubled since September 2009, rising from over 26,000 accounts to almost 50,000 accounts in March of this year.
Speaking to RTÉ radio yesterday Labour senator Marie Maloney said her party’s senators were examining the Scottish set-up.
“We are looking at the moment at the Scottish model and they have two proposals, the mortgage to rent scheme and the mortgage to equity scheme,” she said.
Currently, the Scottish government offers two ways to help homeowners who are in mortgage difficulties.
Firstly, through the Mortgage Rights (Scotland) Act 2001, households who might otherwise become homeless when their homes are repossessed are given the breathing space they need to sort themselves out.
The act provides for debtors to request the court in certain circumstances to give them time to secure alternative accommodation or, where possible, repay any arrears and get their mortgage back on track.
Second, the Home Owners’ Support Fund provides help to home owners in financial difficulty through mortgage-to-rent and mortgage-to-shared equity schemes.
Under the mortgage-to-rent scheme, the government can arrange for a social landlord — such as a housing association or local authority — to buy the home and for the previous owner to continue to live there as a tenant.
Meanwhile, the mortgage-to-shared-equity scheme involves the government taking a financial stake in the home.
Under this, the owner remains as owner and continues to have responsibility for maintaining and insuring it. However, they will be able to reduce the amount they have to pay to their lender every month.
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