Tackling mortgage arrears - €100m initiative is welcome

The deal between the AIB, the Irish Mortgage Holders’ Association, and iCare Housing association is a welcome effort to tackle, in a substantial way, the crisis of mortgage arrears.

It is the first time since the recession that any major lender has brought innovation and determination to such an intractable problem.

Official figures show that around one in 10 mortgages are still in arrears, with 51,750 homeowners 90 days behind on their monthly payments.

Various attempts have been made to deal with the level of arrears but, up to now, none have proven to be effective.

All they offered to homeowners in arrears was the bleak prospect of renting the home they once owned for the rest of their lives, with little prospect of ever buying it back.

This new initiative is different, in that it offers hope to householders, by having their debt written off, with the option of buying back their home, in the future, at a discounted price. The investment by AIB is substantial.

It will give iCare €100m to buy properties, which will be rented back to families on a long-term (28 to 30-year) lease.

It is also, perhaps, a recognition by the bank that the Irish courts will remain reluctant to enforce repossession orders for mortgageholders in long-term arrears.

In any event, all repossessions will do is worsen the homelessness crisis by putting families out on the streets.

A bailout for distressed homeowners may be at hand.