Hundreds of financially struggling homeowners have contacted the Irish Mortgage Holders Organisation (IMHO) since it reached agreement with AIB last year for some customers to stay in their homes as renters, its founder has said.
Permanent TSB is the latest bank to sign up to an initiative with the IMHO and iCare Housing, both run by mortgage campaigner David Hall, to keep customers in mortgage difficulties in their own homes, once they qualify for social housing.
The iCare Housing charity has agreed to purchase over 100 homes for families in mortgage arrears who are eligible for social housing, allowing them to remain in their own homes.
Permanent TSB said where mortgage debt is deemed unsustainable, the customer will be assessed for social housing. Those entitled will then be approved for mortgage-to-rent.
Under the scheme, iCare Housing purchases the relevant property from Permanent TSB, which writes off any residual debt owed to the bank by the customer on it.
The customer becomes a long-term tenant of iCare Housing in the same property, and has the option to buy back their home at any time from iCare Housing at a reduced price.
Mr Hall said: “It’s a specific cohort of people who are under immense pressure, they have little option and are likely to end up losing their homes. We’re four months into the AIB scheme and letters have been written to thousands of affected customers. The numbers have been very good — hundreds have contacted us, we’re filtering through those to see how many of those are suitable.”
Mr Hall said all banks are willing to engage, but that AIB and PSTB have agreed a streamlined process where IMHO as a registered charity “handheld the customer through the entire process”.
“It means the customer doesn’t have to engage with the bank anymore, which has been a tortuous experience. What the other lenders aren’t currently doing is a package where a discounted sales price is agreed, but we are going to start negotiating with them.
“The reason that element is important is that as soon as customers get back on their feet, they can buy the home back from us at the discounted price we paid for it,” Mr Hall said.
Legal proceedings with AIB and Permanent TSB are adjourned under the scheme while mortgage holders are being assessed for mortgage-to-rent suitability, Mr Hall added.
Permanent TSB chief executive Jeremy Masding said: “David Hall and the IMHO have built a compelling mortgage-to-rent solution which will be an important part of our response to customers in mortgage difficulties. This approach will also play a limited role in reducing our ratio of non-performing loans.”
Meanwhile the Central Bank has said total renegotiated mortgages amounted to €346m in December.
The renegotiations were split almost evenly between fixed and variable rates