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SOCIAL BOOKMARKS

Mortgage scheme ‘too reliant on private sector’

THE PRESIDENT of the Cork Council of Trade Unions has said a new Mortgage to Rent (MTR) scheme is too reliant on the private sector.

The Home for Life housing body has made a presentation to both Cork city and county councils’ housing committees this year.

Their MTR scheme allows approved housing bodies to buy homes with distressed mortgages and lease them back to local authorities, who are then charged rent at 95% of the current market value for 25 years, allowing the mortgage holders to remain in their homes.

However, Cork Council of Trade Unions president, Barry Murphy, has said the body is “not the guardian angel” of people in mortgage distress and the scheme could be administered by local authorities with the profits being pumped back into local services.

“I was at the presentation that [Home For Life] made to Cork City Council. We welcome any scheme that that would help keep distressed mortgage holders in their homes. That’s a given. But here we have an over-reliance on the private sector.

Home For Life CEO Paul Cunningham has said the enterprise, which is supported by homelessness advocate Fr Peter McVerry, is borrowing from Irish banks to purchase the houses and will not make a “massive” amount of profit.

“If there were massive profits, I would suggest that scheme would have attracted a number of providers of the scheme. Only one private provider is providing MTR. We are required to provide MTR to all homeowners anywhere in Ireland irrespective of the cost bring the property to a correct standard or irrespective of the what the rent achievable on the property is.

“All the people in Home for Life are very proud of the contribution they make in assisting home-owners efforts to remain in their homes the length and breadth of Ireland in delivering long term sustainable solutions for ‘Families that find themselves at risk of losing their family home because of unsustainable mortgage debt’,” he added.

Mr Murphy has claimed homeowners will have to sign over what they have already paid off of their mortgages.

“Even on an average three-bedroom house in Cork, if [Home For Life] is going to tie the local authority into 95% of the current rental value of a house like that when rents are at a historic high, they are going to walk away with a massive amount of profit.

“They are tying the taxpayer into a 25-year bailout and then they end up with the property as well. Why not leave the local authority deliver the scheme and any money that is made from the scheme is invested back into public services?” he added.