A NEW mortgage support scheme for those who have experienced a sudden drop in income will be proposed to the Government today by the social housing group Respond.
The Homeowners Mortgage Support Scheme would give people the option to renegotiate their mortgage, and to defer up to 70 per cent of the interest on their monthly repayments for no more than two years.
Respond spokesman John Hannigan said a similar measure was recently agreed in Britain.
He said the scheme was essential for Irish homeowners, and time was of the essence because people in employment would experience a “dramatic” loss in earnings from May 1st because of budget cutbacks.
“It is only in the coming months will we know the real extent of this recession on Irish families, and this Government needs to act now to protect them.”
Mr Hannigan said the lending institutions should offer this assistance to homeowners as their risk has already been secured through Government-guarantee schemes and the recapitalisation scheme for banks.
“This is simply a method of deferring payment, not cancelling it. We are also proposing that those given excessive mortgages that far exceeded their income should be allowed renegotiate their mortgage to a suitable level appropriate to their current income.”
The charity said the recent mortgage moratorium did not help many homeowners as it simply delayed the inevitable by allowing arrears to accumulate for a year.
The Respond proposal would only apply to owner occupiers with mortgages of less than €500,000, and it would not be open to people who owned more than one property.
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