Pilot scheme to help keep people in home
07/02/2012 at 16:39
A not-for-profit housing association, Cluid, today said they are launching a pilot scheme to help those in danger of losing their homes because of mortgage arrears to stay in their homes.
The scheme, starting with AIB loans, will see the mortgage holder voluntarily handing over the property to AIB who will then sell it to Cluid at current market value. Cluid will in turn rent it out to the former mortgage holder based on their ability to pay.
Cluid Housing Association is working with the Department of the Environment, Community and Local Government on a pilot 'mortgage-to-rent' scheme. The scheme was recommended as part of the Keane report on mortgage arrears.
The Association is currently working with the Department, the Housing Agency and AIB to agree the final details of the pilot scheme
"The aim is to assist vulnerable home-owners who have unsustainable mortgages and are in danger of losing their home," said Brian O'Gorman, Chief Executive of Cluid. "We anticipate that the pilot scheme will involve a small number of households"
"At the moment, the scheme is being finalised and we are working with all of the organisations involved to iron out the details. We look forward to working on this pilot. We view it as an important initiative in assisting vulnerable home-owners who are in danger of losing their homes." The pilot scheme will involve households that: Have had their mortgage position deemed unsustainable, under a Mortgage Arrears Resolution Process; Agree to voluntary surrender their home to their lender; Have a home with a current market valuation of no more than E220,000; Do not own any other properties; Do not have significant positive equity, and are eligible for social housing support with the local authority
After voluntary surrender has taken place, the properties in question will be purchased by Cluid at current market value
The households involved will then become tenants, paying a weekly rent to Cluid based on their income. They will no longer be homeowners and will have no legal or financial interest in the property
It is anticipated that the Government will roll out the scheme nationally to all lenders following the pilot. In the interim those facing difficulties with their mortgages should contact their lender
"Cluid's involvement in this project is reflective of the innovation and responsiveness that are at the heart of the organisation," said Brian O'Gorman
Mr O'Gorman, who is also President of the Irish Council for Social Housing said "our involvement in the pilot 'mortgage-to-rent' scheme demonstrates the willingness of the sector to adapt to the changing environment by leading the way in offering housing solutions that meet the changing needs of people in the aftermath of the recession, etc."