Social Justice Ireland proposes Equity scheme for those in Long term arrears

Brendan Burgess

Brendan Burgess

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www.socialjustice.ie

Equity Scheme for Long Term Mortgage Arrears needed | Social Justice Ireland

According to the latest Central Bank figures for Q3 2023, 708,810 private residential mortgage accounts for principal dwellings are held in the Republic…
www.socialjustice.ie www.socialjustice.ie

  1. Government would establish an equity fund to support borrowers in long-term mortgage arrears.
  2. A call would be made to borrowers who meet eligibility criteria to apply to access the fund in exchange for giving the State an equity stake in their property.
  3. An assessment of the borrowers' eligibility, property condition and equity proportion would be conducted and approval granted / denied within a specified period set out in Regulations.
  4. If the application is approved, the State would pay the equity amount direct to the mortgage lender, decreasing the amount owed by the borrower and, consequently, their mortgage repayments (it may also be the case that the amount is used to clear arrears on the mortgage if the borrower can sustain the mortgage repayments, but not the additional arrears repayments).
  5. The equity stake would be registered as a charge on the property, subordinated to the mortgage(s) registered at the time of application. No subsequent subordination in favour of new mortgages would be permitted save in the case of a remortgage by the borrower to take advantage of more favourable rates and reduce their indebtedness.
  6. The borrower will have the option to repurchase the equity at a point in time.
 
I don't really understand the use of the word "equity" in this context.


When I see "equity" I assume it means that the state buys half the house from the homeowner and so the state gains or loses as house prices change.

Or are they simply proposing that the state replaces the lenders' loan with a loan from the government?

Brendan
 
Brendan Burgess said:
I don't really understand the use of the word "equity" in this context.


When I see "equity" I assume it means that the state buys half the house from the homeowner and so the state gains or loses as house prices change.

Or are they simply proposing that the state replaces the lenders' loan with a loan from the government?

Brendan
Click to expand...

Given the name of the organisation it could be either.
 
Harvard said:
Given the name of the organisation it could be either.
Click to expand...
Given that it’s an organisation which has taken ownership of such a broad term as “Social Justice” it’s very probable that it’s more ideologically driven nonsense.
 
Does it also mean that when the house is subsequently sold, the state gets it;s stake back and either takes a loss (if the house has dropped in price) or makes a profit (if the price has risen).? And does it also mean that the stake the state takes in effect involves a direct payment to the lenders to clear the arrears?
 
Yes, it would be a direct payment to the lender rather than to the borrower.

I don't know if it's an equity stake in the normal sense of the word or an interest-bearing loan secured on the equity in the property.

Brendan
 
The State already had the stake in all those mortgages when the Banks got so much state money in the post Celtic Tiger Crash , the State then forced the Banks to offload the bad loans so they could sell their shares in AIB , BOI and PTSB etc .
 
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