Noonan backs mortgage-to-rent plans
Published 12/10/2011 | 11:42
Up to 10,000 people will lose ownership of their homes and pay rent instead to keep the same roof over their head under Government proposals.
Finance Minister Michael Noonan signalled his backing for the so-called Keane report into the mortgage crisis which has ruled out blanket debt forgiveness as too costly.
The report, to be debated in the Dail next week, recommends a case-by-case approach to help the tens of thousands of homeowners struggling to make repayments in the wake of the property and economic crash.
It said mass debt forgiveness for those suffering negative equity was too expensive, at a cost of 14 billion euro (£12 billion) to the banks, and insisted the vast majority of mortgage holders can and must continue to fully repay their debts.
But one of the key proposals is a mortgage-to-rent scheme for those who cannot meet their repayments. A housing agency or local authority will either buy out or lease the homes from the banks and allow families to stay on while paying rent and servicing their debts.
Two pilot schemes are being set up by Housing Minister Willie Penrose which will be rolled out nationwide once any problems are resolved.
Mr Noonan accepted thousands of people will lose their homes. "Losing ownership is a big issue and that's going to cause a lot of grief for people, but actually losing the roof over your head is a much bigger issue," he said. "What we want to do is make sure people continue to live in their own homes."
Report author Declan Keane, an official at the Department of Finance, indicated between 5,000 to 10,000 are expected to take part in the mortgage-to-rent schemes.
Mr Noonan said Justice Minister Alan Shatter was also finalising an overhaul of insolvency laws which would reduce bankruptcy terms from the current 12 years to three. This legislation should be ready within weeks.
Fianna Fail published its own proposals based on the Law Reform Commission's report into mortgage debt while Sinn Fein finance spokesman Pearse Doherty dismissed the Keane report as short on detail and solutions.