iCare Housing

Zamboni

https://www.rte.ie/news/business/2017/0927/907836-housing-mortgage-to-rent/

The Irish Mortgage Holders Organisation has said a deal, done with AIB to help owners in mortgage arrears stay in their homes, is a phenomenal opportunity for people to get back on their feet.

The new initiative has been set up to help keep people who have fallen into arrears on their mortgage - and who qualify for social housing - in their own homes.

AIB, the Irish Mortgage Holders Organisation and iCare Housing have agreed a deal which sees the bank buy out hundreds of homes from distressed mortgage holders. These homes are then rented back to them.

David Hall, chief executive of the IMHO and iCare, said it was a sensible, practical solution to the current housing crisis.

He said that some people are under such immense pressure with mortgage arrears that they have not been able to work. This will change their lives, he added.

Speaking on RTÉ's Today with Sean O'Rourke, Mr Hall said that mortgage holders (who are in trouble) with AIB, Haven and EBS should contact iCare Housing organisation to see if they qualify for the scheme.

"For AIB, EBS and Haven customers an option now exists, for those who qualify for mortgage to rent, to remain in their homes, have their residual mortgage debt written off and have the option to buy their home back in the future for a price that is discounted from today's market value," Mr Hall added.

Under the scheme AIB will give iCare €100 million to buy properties, which will be rented back to families on a long term (28-30 year) lease.

There are some criteria for qualification, including a cap on property value and income levels.

Renters, whose circumstances change, will have the opportunity to buy the houses back, at the same price iCare pays for it, if they wish.

Mr Hall pointed out that these houses are not currently available for social housing, so it will not take homes from those already on social housing lists.

He said he was hopeful the scheme could be extended to other lenders.

Customers of AIB, Haven and EBS who complete the "mortgage to rent" process will continue to live in their home as long-term tenants of iCare Housing - a not-for profit approved housing body.

Under the terms of the initiative, they can buy back their home at the discounted price paid by iCare Housing if their circumstances improve.

iCare will be funded via the Housing Agency, rent roll from the local authority, and commercial lending.

It will also be supported with commercial funding from AIB Corporate Banking.

David Hall, Superhero or Supervillian...

On the face of it this seems great!
People get to stay in their "own" home, rent paid by social housing and they can buy back their home at the same price iCare bought it.
Wonderful!

Or does it?
iCare would purchase hundreds/thousands of distressed properties at knock down prices from vulnerable people in a rising market.
AIB write off residual debt (us tax payers foot the bill)
Persons become tenants less ability to withstand evictions notices.
What is the likelihood of a person who has had to voluntary surrender a house because of a distressed mortgage getting a mortgage again in the future to buy it back!?
Why does iCare want to own a massive amount of housing stock?
How is rent calculated?
Social housing pay rent to iCare (us tax payers foot the bill)
What is the end game here? The logical conclusion would be a very powerful organisation with a serious balance sheet in property and cash.

Are your spidey-senses tingling or is this an awesome solution

SEPT 23 1989

Hall seems genuine

this nonsense should have been sorted out years ago

Muahahaha

This seems to be the end game of almost a decade of David Halls work. Im guessing the banks will be paying him a fee for every non preforming mortgage he gets off their hands. Perhaps 10k per house x 3,000 people on his books = 30m turnover for his organisation. Nice work.

Stheno

This was on the last word today

The govt will pay a 40 % deposit towards the purchase price and 2 % interest per year for the duration of each 28 year lease.

If a house is bought for 100k tomorrow it can be bought back for that price at any stage during the 28 year lease

Applicants have to be eligible for social housing so a family in Dublin would be earning less than 40k to qualify

Rent will be based on hap and subsidised by local authorities

I've mixed feelings on this, during the recession I lost my job and my partner was unemployed for many years. Our income dropped by 40 % and we did go into arrears but our absolute priority was the mortgage which has been up to date for six years but at one point 70% of our reduced income went to it so I feel a little resentful that others are getting debt wiped out

On the flip side I'm glad families will not lose their home.

I do however strongly feel that the buyback clause is wrong its like stealing from taxpayers

Hitman3000

A scheme similar to this has operated in Portugal for quite some time, finally some sense. Only the most distressed will be able to avail of this it's not as of the bank won't examine the financial status of those that benefit from the proposed scheme. Ideally it will distinguish between distressed and reckless borrowers.

Stheno

Hitman3000 wrote: »

A scheme similar to this has operated in Portugal for quite some time, finally some sense. Only the most distressed will be able to avail of this it's not as of the bank won't examine the financial status of those that benefit from the proposed scheme. Ideally it will distinguish between distressed and reckless borrowers.

They are already espousing extending the scheme to include those not eligible for social housing

Hitman3000

Stheno wrote:

I do however strongly feel that the buyback clause is wrong its like stealing from taxpayers

What bank is going to be happy to extend a mortgage to someone who has shown they are unable to pay a mortgage.

Hitman3000

Stheno wrote:

They are already espousing extending the scheme to include those not eligible for social housing

Would you rather people were left in the current situation that exists? It is time this was tackled. I struggled too to pay my mortgage but I have no desire to see a family suffer financial punery just so moral hazard is avoided.

Stheno

Hitman3000 wrote: »

What bank is going to be happy to extend a mortgage to someone who has shown they are unable to pay a mortgage.

After five years the records on the in are expunged

Regardless a 15 year old kid in one of those families who does well on life can gift mom and dad the money to buy back in 25 years

Or mom and dad might find that the house they sold for 100k can be bought back free and clear if they save 100 a week for twenty years

Given they will get hap that may well be feasible

Doltanian

More for me me me. God Ireland is one socialist infested dump. How about repossess the homes and kick those who are not paying out. We really need a right wing revolution here and sooner than later.

Stheno

Hitman3000 wrote: »

Would you rather people were left in the current situation that exists? It is time this was tackled. I struggled too to pay my mortgage but I have no desire to see a family suffer financial punery just so moral hazard is avoided.

I'd rather people engaged with their lenders and address their situations

Stheno

Hitman3000 wrote: »

Would you rather people were left in the current situation that exists? It is time this was tackled. I struggled too to pay my mortgage but I have no desire to see a family suffer financial punery just so moral hazard is avoided.

I'd rather people engaged with their lenders and address their situations

Hitman3000

Stheno wrote:

Regardless a 15 year old kid in one of those families who does well on life can gift mom and dad the money to buy back in 25 years

That would be his/her decision if they are allowed but it back during the lease period.

Stheno wrote:

Or mom and dad might find that the house they sold for 100k can be bought back free and clear if they save 100 a week for twenty years

What's your alternative? These people get turned out of their home still have to be housed, in this manner they are surrendering an asset and signing a lease that runs for a 30 year time scale.

Hitman3000

Doltanian wrote:

More for me me me. God Ireland is one socialist infested dump. How about repossess the homes and kick those who are not paying out. We really need a right wing revolution here and sooner than later.

So after you kick these families out, where do you propose to house them?

Stheno

Hitman3000 wrote: »

That would be his/her decision if they are allowed but it back during the lease period.

What's your alternative? These people get turned out of their home still have to be housed, in this manner they are surrendering an asset and signing a lease that runs for a 30 year time scale.

Ive no problem with a long lease enabling people to rent and save for a future, I've a huge problem with inserting a clause allowing buy back at the original price 28 years later

Hitman3000

Stheno wrote:

Ive no problem with a long lease enabling people to rent and save for a future, I've a huge problem with inserting a clause allowing buy back at the original price 28 years later

They will be renting the property for the period of the lease at a differential rent, personally life is to short to begrudge people climbing out of a pit of despair.

Mrs OBumble

I forsee operational nightmares. eg Family has 20 years left of a 30 year lease. Main income earner loses their job, and gets another on the other side of Dublin. Is there any option to transfer to a closer house?

Also some major estate-management challenges: many of the houses won't meet the current building standards for HAP, and even basic maintenance (eg annual boiler servicing) is likely to have been neglected for years.

Families won't take kindly to only getting maintenance that's approved by iCare, and to not being allowed to have their existing friendly neighbourhood plumber/spark etc (who just happens to not have the right paperwork to work for iCare) do work on the house.

Stheno

Hitman3000 wrote: »

They will be renting the property for the period of the lease at a differential rent, personally life is to short to begrudge people climbing out of a pit of despair.

They'll be getting hap staying in their homes with a chance to buy it back after a huge write down of debt

And after writing that debt off and becoming social housing tenants where the most of the rent is paid through hap and the govt pay 2% interest on the purchase price they could in 20 years time buy a property for a fraction of its cost.

The house I have a mortgage on has increased 250% in value since I bought it 15 years ago so potentially these people both have debts qeitrwn off, live in preferred areas at minimal rent and st and to make huge gains.

All due to refusing to engage with lenders

Villa05

Hitman3000 wrote:

They will be renting the property for the period of the lease at a differential rent, personally life is to short to begrudge people climbing out of a pit of despair.

It's not begrudgery, these properties should be kept for social housing and help others who fall onto despair. The previous owners have residual debt written off and jump to the top of a social housing queue. They have done well out of the transaction. Option to buy back is a step too far

Despair is temporary.

Otherwise the scheme should have been done years ago

Hitman3000

Stheno wrote:

All due to refusing to engage with lenders

Sweeping generalisation, you are not party to what criteria people will have to satisfy to be accepted on this scheme. It was only announced today and the full detail has not been released. You still have not outlined an alternative. What your personal circumstances are frankly tbh is irrelevant as are mine.

Hitman3000

Villa05 wrote:

It's not begrudgery, these properties should be kept for social housing and help others who fall onto despair. The previous owners have residual debt written off and jump to the top of a social housing queue. They have done well out of the transaction. Option to buy back is a step too far

They haven't jumped to the top of the housing queue, they just have not been made homeless. I fail to see whose interests that would serve.

Stheno

Hitman3000 wrote: »

Sweeping generalisation, you are not party to what criteria people will have to satisfy to be accepted on this scheme.

Actually I did by mentioning income limits in my first post


That's the first criteria along with the maximum values announced today

So in Dublin if your family income exceeds 40k and your house is worth more than 365k you don't qualify

Hitman3000

Stheno wrote:

That's the first criteria along with the maximum values announced today

Part of the process is also to identify distressed borrowers from reckless borrowers. I do have reservations about the buyback clause but I think it is a small price to pay to help those that genuine need it. Perhaps the clause may be removed. However if the family intend staying in the house forever I don't see a problem with them eventually buying it. Once there is a claw back option on any potential gain they make if they ever sell it on.

Stheno

Hitman3000 wrote: »

Part of the process is also to identify distressed borrowers from reckless borrowers. I do have reservations about the buyback clause but I think it is a small price to pay to help those that genuine need it. Perhaps the clause may be removed. However if the family intend staying in the house forever I don't see a problem with them eventually buying it. Once there is a claw back option on any potential gain they make if they ever sell it on.

I'd agree with claw back but that was not mentioned today on the radio today a d David hall was the person explaining it

He came across quite badly tbh

Doltanian

Hitman3000 wrote: »

So after you kick these families out, where do you propose to house them?

Either they pay THEIR debts or else fend for themselves it shouldn't be up to the taxpayer to provide a home when the countries infrastructure is languishing behind. Let them emigrate or end up homeless I couldn't care less.

Hitman3000

Doltanian wrote:

Either they pay THEIR debts or else fend for themselves it shouldn't be up to the taxpayer to provide a home when the countries infrastructure is languishing behind. Let them emigrate or end up homeless I couldn't care less.

So no solution from the keyboard warrior, no surprise there.

Graham

Mod Note: Attach the post, not the poster.

Ray Palmer

I really want to see all the details. The idea of selling it back at a 28 year old price bothers me.
There are can pay won't pay people that are within those that will apply so what are the safeguards?

Really don't want anybody homeless but elevating expectations and motivation is important.

Stheno

Ray Palmer wrote: »

I really want to see all the details. The idea of selling it back at a 28 year old price bothers me.
There are can pay won't pay people that are within those that will apply so what are the safeguards?

Really don't want anybody homeless but elevating expectations and motivation is important.

Fair few details from Brendan Burgess of iCare here

https://www.todayfm.com/The-Last-Word-with-Matt-Cooper/Families-Who-Cant-Pay-Mortgage-Can-Stay-In-Their-Homes

Lasts about five minutes

Spanish Eyes

The only issue for me is the buyback at the original discounted cost after a potential 28 years.

Sorry but that is not right to me.

Maybe it could be current market value at time of re purchase less the % discount allowed today, minus capital repayments that owner managed to pay.

After 28 years to be able to purchase at discounted 2017 values is just wrong on so many levels. Sigh. But the theory of keeping people in their homes is a good one none the less.

Stheno

Spanish Eyes wrote: »

The only issue for me is the buyback at the original discounted cost after a potential 28 years.

Sorry but that is not right to me.

Maybe it could be current market value at time of re purchase less the % discount allowed today, minus capital repayments that owner managed to pay.

After 28 years to be able to purchase at discounted 2017 values is just wrong on so many levels. Sigh. But the theory of keeping people in their homes is a good one none the less.

I also 100% support keeping people in their homes and disagree with the buyback.

I also have a problem with the government stumping up a forty percent deposit and paying 2% per year over 28 years tbh along with paying HAP

that means for every 100k house bought the government will pay €180000 between deposit and interest (40k deposit and 5k interest per year for 28 years (it's simple interest)) to keep a family in their home, along with HAP!

Meanwhile the family that have been subsidised to that extent and have had debt paid off can choose to buy back for 100k?

I'm just not seeing the economics here maybe?