Labour working hard to keep people in their homes - Lynch
Issued : Wednesday 8 February, 2012
Statement by Ciarán Lynch TD
Determined to keep distressed mortgage holders in their homes, Labour's Minister Jan O'Sullivan has concluded the first transaction under a new mortgage-to-rent scheme. The family, living in West Dublin will now rent their home from the housing body Cluid, rather than face the trauma of repossession along with having to deal with both the upheaval and financial costs arising from securing alternative accommodation.
As part of the scheme, the lender has written off a significant portion of the debt associated with the original loan and the Department of the Environment has provided 25% of the equity for the new loan. It is expected that more distressed borrowers will avail of the scheme as the pilot is rolled out.
The issue of households with Mortgage Arrears is one of the biggest social and economic problems facing the country, and Labour in Government is confronting it as a matter of urgency. It was a key policy priority in Labour's Manifesto in the General Election and was reflected in the Programme for Government.
Already the Government has published and is seeking to implement the Keane Report (2011), the recommendations of which reflected those made in Labour's manifesto. The Personal Insolvency Bill is seeking radical reform of Ireland's bankruptcy laws, providing for Debt Relief Certificates for those accumulating debts up to €20,000 and a Debt Settlement Process and Personal Insolvency Arrangement which would allow home owners to enter into an arrangement with banks in order to write down mortgage debt on a case by case basis.
The legislation will also allow for the establishment of Personal Insolvency Trustees which would act independently of the banks in assisting home owners to work out a series of options in dealing with their mortgage debt and in doing so will address the balance of the relationship between borrower and lender.
Mortgage interest relief is also being increased to help those who bought at the height of the boom and to facilitate purchase by first time buyers, as outlined in the Budget speech and detailed today in the Finance Bill.
For any family, keeping a roof over their head is the number one concern. According to the Central Bank there are 55,000 mortgages in arrears across the country. The Labour Party's priority is keeping people in their homes, where at all possible. We propose solutions that begin on a case by case basis. This is the fairest route for those in genuine difficulty and the new mortgage-to-rent approach is aimed at those who cannot afford their mortgages to the point that they would otherwise be evicted.
Labour remains determined to implement the other recommendations of the Keane Report that will deal effectively with this desperate situation. We recognise it is a multifaceted problem and there is more work to be done, but progress has been made and this reflects our delivering on what is a key priority for government.
