Is mortgage renter deal a cop-out?

 

Sir, – The new mortgage renter deal announcement is a cop-out (“New scheme to keep distressed borrowers in their homes”, September 27th).

It places all the risk for lending money on the borrower when a properly functioning market should expect the lender to carry out due diligence too. The deal does nothing to help people “get back on their feet”, as claimed by the Irish Mortgage Holders Organisation (IMHO). The deal doesn’t explain what happens when these renters get to retirement. Who is going to pay the rent then when those people have no retirement savings as they’ve spent their working life paying a private-sector mortgage level of rent on a property they can never own?

The morality of making people pay mortgage rates and then selling that house from under them in retirement is disgusting. If a person is in arrears on their mortgage, it is most likely because their income is insufficient or the property value has fallen. As long as the mortgage is up to date, negative equity doesn’t matter because eventually the mortgage will be cleared and the homeowner will have an asset to sell. If their only financial problem is that the property is not worth as much as they thought, then they should count their blessings. But for other people with more serious arrears, this new deal is a dud.

What’s the point of people needing a deposit when they take out a loan if they can’t access that extra equity when things go wrong? Why can’t the rate be capped and the term extended, as is the way in other countries? Why does Ireland only ever copy failed US or UK policies and never learn from countries with other ways of doing things, even OECD and European Economic Area ones?

Not only are taxpayers still paying off AIB’s loans, but they are also paying for higher taxes and less services to pay off the increased borrowing the State took on to bail out AIB, and are not getting any debt relief.

Mixing the private and public sector housing does not work in any country. Irish policymakers seem incapable or unwilling to learn from the experience of other countries that do get it right. – Yours, etc,

DESMOND FitzGERALD,

Canary Wharf, London.