Article: Only 26 homeowners in Dublin city approved for Mortgage to Rent scheme

[Paul F]

A very detailed article:

Just 26 Homeowners in the City Approved for Scheme to Keep People Struggling with Mortgage Arrears in Their Homes Last Year

Although the government made changes to make the mortgage-to-rent scheme more attractive, the number of people using it actually fell – instead of rising.

dublininquirer.com

Nationwide, 432 homeowners became social housing tenants through the mortgage-to-rent scheme, of which 67 were in the wider Dublin region.

Across Ireland, almost 31,000 homeowners have been in mortgage arrears for more than 90 days, show Central Bank figures.

Lenders, whether banks or so-called vulture funds, have issued formal demands for payment from around 6,000 of those, while about 5,800 more are involved in proceedings before the courts.

Household income must be within the social housing income threshold and the house has to be approximately the right size for the household.

The home must be valued under the price cap for that county and there should be only “marginal equity” in the home – meaning the home cannot be worth a lot more than the mortgage loan owed on it.

A spokesperson for the Department of Housing said that in 2022 the amount of equity allowed increased from €25,000 to €35,000.

The property price cap was pushed up by 14 percent too. It is currently €450,000 for a house in Dublin and €335,000 for an apartment, they said.

If a house is in negative equity, the lender is more likely to negotiate, she says. It might allow the homeowner to pay interest only on the mortgage, in the hope that in the future they will start repaying the capital too, says Rogers.

By contrast, when house prices are high and in positive equity, lenders will push for repossession to recoup the full amount they are owed, she says.

It could be an issue of concern that the mainstream banks are no longer in possession of the majority of distressed mortgages, which have been sold to funds, says Ó Broin. “They are potentially sitting on the asset waiting for the property price to be higher than the mortgage.”

Seventy-four percent of mortgages in arrears more than a year are now held by non-banks, according to data from the Central Bank.

 

[NoRegretsCoyote]

As I've said for a long time, many people with accrued arrears have some combination of positive equity, a house bigger than their needs, or an income above subsistence levels.

They don't qualify for MTR and are planning to pay down arrears eventually from inheritance, pension lump sum, etc. Banks don't squeeze people for small amounts as it's not worth it.

 

[Paul F]

@NoRegretsCoyote Yes, I was reading the older thread that you contributed to.

Irish Times: Mortgage to Rent scheme fails to tempt distressed homeowners

https://www.irishtimes.com/your-money/2022/09/06/mortgage-to-rent-scheme-fails-to-tempt-distressed-homeowners/ It was first introduced back in 2012 but, some 10 years on, a Government supported scheme, which aims to help distressed borrowers remain in their homes has had limited take-up...

www.askaboutmoney.com

So it seems that the uptake for the scheme will remain very low (especially in Dublin) unless the rules are changed significantly or property prices fall significantly.

 

[Purple]

Only 26 homeowners in Dublin city approved for Mortgage to Rent scheme

Good. The State should not be competing with private home buyers and using their taxes to price them out of the market. The State should never buy an existing private house for use as social housing. It is outrageous that it ever happens.