How Mortgage to Rent Works

So the state pays the following:

1. 30% of purchase price (Balance funded by AIB loan)
2. State pays full rent to icare, forever
3. If the tenant doesn't pay the low amount of rent to the LA it just goes onto the amount that is constantly outstanding
4. State pays for all repairs
5. State is exempt from RTB

What does iCare get:

1. 19 properties, with another 600 to come on stream (second biggest landlord in the country)
2. Full rent
3. No property costs
4. Can sell the properties in time at a profit
5. Do they pay rental income tax? Does being a charity affect this?
6. Doesn't have to deal with the tenancy as that's up to the LA
7. No oversight by the RTB as they are not the landlord
8. Employment forever running iCare.

What does the property owner get:

1. They lose their house
2. They can live in it for a minimum amount
3. They are allowed purchase it for the price iCare paid for it

What does the bank get:

1. They get rid of their most problematic cases
2. No bad publicity for evicting families
3. Their books look better

What does the media get:
1. A lovely happy story, bad bank, good guy Hall, family stays in home.

Where can all this go wrong taxpayers?
 
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Charlie has an article in today's Indo quoting my views

Mortgage-to-rent plan 'a scam on taxpayers - it's like a lottery win'

Mr Burgess claimed those getting a mortgage-to-rent deal were equivalent to Lottery winners.

Housing charity iCare leases the property back to the occupants on a long lease, ensuring the former owners that were at risk of losing their home can stay in it long term and pay an affordable rent.

But Mr Burgess said: "Mortgage-to-rent is a scam on the taxpayer. It is a scam on the people who have already been on the housing list many years. It is a lottery win."
 
Brendan Burgess said:
I will be discussing it with David Hall on Newstalk Breakfast at 7.20 on Monday morning.
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Nice picture BB. Did you delete the thread I started on this? If yes, I'd like my original first post if you have it please.

Can't wait to hear you on Monday. I hadn't realised you thought this was a scam on the taxpayer. I see Hall in the article says his scheme saves the tax payer money. Do you know on what basis he is claiming that?

You're not going to look good claiming Hall isn't a saviour to people.
 
Bronte said:
I see Hall in the article says his scheme saves the tax payer money. Do you know on what basis he is claiming that?
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I presume he will use the cost of putting people up in hotels at several thousand euro per month as there's no other accommodation available
 
The mortgage to rent scheme has been in existence seven years and has only served 400 homeowners.

This is despite the fact that during the same time the number of PPRs with arrears of 2 year or more has never numbered less than 30k!

Vast numbers in arrears, and very few qualifying for mortgage to rent. Why?


Likely because income levels aren't actually low enough to qualify for social housing. And the house value is above the thresholds for eligibility: €350k in big urban areas, and €280k elsewhere.

Of course many people will swear blind that strategic default does not exist in Ireland;)
 
Bronte said:
So the state pays the following:

1. 30% of purchase price (Balance funded by AIB loan)
2. State pays full rent to icare, forever
3. If the tenant doesn't pay the low amount of rent to the LA it just goes onto the amount that is constantly outstanding
4. State pays for all repairs
5. State is exempt from RTB

What does iCare get:

1. 19 properties, with another 600 to come on stream (second biggest landlord in the country)
2. Full rent
3. No property costs
4. Can sell the properties in time at a profit
5. Do they pay rental income tax? Does being a charity affect this?
6. Doesn't have to deal with the tenancy as that's up to the LA
7. No oversight by the RTB as they are not the landlord
8. Employment forever running iCare.

What does the property owner get:

1. They lose their house
2. They can live in it for a minimum amount
3. They are allowed purchase it for the price iCare paid for it

What does the bank get:

1. They get rid of their most problematic cases
2. No bad publicity for evicting families
3. Their books look better

What does the media get:
1. A lovely happy story, bad bank, good guy Hall, family stays in home.

Where can all this go wrong taxpayers?
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Very similar to Cluid who now have 2500 properties with a plan to buy or build 1500 more in the next 3 years.

Funded by state grants, government loans and private finance. I know when I sold a house to them it was 100% financed by the county council.

They also keep all the rent although I am not sure whether it is paid directly by the tenant or the council.

Staff costs are 9 million. Net surplus also around 9 million a year.

The only difference I can see between the two are that Cluid is not buying non performing loans. They pay full market value.
 
I had a look at the figures up to the end of December published by the Housing Agency

upload_2019-1-19_10-47-38.png

upload_2019-1-19_10-47-53.png



Why are so many rejected?

· They must qualify for social housing

· The housing must be appropriate to their need

· They must be in negative equity or close to it

· They must have income below €35,000

· The maximum value must be €365k or €310k

And, all the following must agree

· The home owner

· The lender

· The local authority

· The MTR Fund
 
NoRegretsCoyote said:
Of course many people will swear blind that strategic default does not exist in Ireland
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I fully believe that there are a large number of straregic defaulters, but I wouldn't use the fact that people aren't eligible for MTR as evidence of that.
Essentially, you have to be eligible for council housing.
There are lots of people in genuine difficulty who simply do not meet the criteria.
 
Im sure David Hall will be on the normal CEO rates of salary and expenses + pension and lump sum that these high profile charities like to pay. Having Peter McVerry in the picture makes them all look good. A few more pictures and presenting a sob story will help Hall's profile in a friendly media.
 
Delboy said:
I presume he will use the cost of putting people up in hotels at several thousand euro per month as there's no other accommodation available
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Well that’s actually a good argument. Hall is stopping people going into hotels at massive cost.
 
Bronte said:
Well that’s actually a good argument. Hall is stopping people going into hotels at massive cost.
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Except the fact that not everyone that becomes homeless needs to be put into accomm in Dublin again. If they don't have a job etc, they should look to outside counties with cheaper housing.
But that argument has been had here before and never the twain shall meet!
 
David hall tweetingt about tomorrow mornings phone call - "I will be on @BreakfastNT tomorrow at 7.15am discussing our @icarehousing Mortgage to rent and Ill informed criticism from Number 1 consumer advocate Brendan Burgess , oh and Burgess will be there also. Is 7.15am to early for popcorn??"
https//twitter.com/davidhall75/status/1087081105084375042?s=19
 
Hall, cheapest and most cost effective in the state. LA pays rent it would pay anyway. Solution that gives people dignity and respect. Keeps them in their homes, but they lose ownership.

BB says people who work can't afford to live in Dublin. Talks about repossession, about how Hall can purchase these houses at very low cost and that Hall has said he'll stop all home repossessions, you have to do buesiness with me or you don't do business at all(taxi example)
 
RedOnion said:
I fully believe that there are a large number of straregic defaulters, but I wouldn't use the fact that people aren't eligible for MTR as evidence of that.
Essentially, you have to be eligible for council housing.
There are lots of people in genuine difficulty who simply do not meet the criteria.
Click to expand...

I take your point. Take an extreme case. Married couple with one income of €36k, mortgage of €300k on 1.2% with 20 years to go. They would have a net monthly income of €2680 and mortgage repayments of €1,400. That's over 50% of income on mortgages before insurance, LPT, etc. This family would really struggle with mortgage repayments but would not qualify for MTR.

That's the extreme, however, both in terms of balance outstanding and income. There are lots of people whose circumtances are easier. Central Bank analysis is surprising in that it shows a lot of people in arrears don't have low incomes and bought pretty valuable houses at origination.

Anyone whose circumstances are worse than the couple above - for example someone permanently on disability - should qualify for MTR.

Despite the hoops of finding an AHB and agreement of your mortgage provider, it's a bit of a mystery why so few have taken it up. My suspicion is that there are a lot of valuable houses with lots of rooms people don't need, combined with a reluctance to move, and this rules a lot of people out.
 
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