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Home Page > News > Michael Noonan’s plan - Irish may be able to rent their repossessed houses

Michael Noonan’s plan - Irish may be able to rent their repossessed houses

Renting from the state seen as possible way to prevent home losses

DARA KELLY,

IrishCentral.com Staff Writer

Published Friday, September 2, 2011, 7:51 AM

Updated Friday, September 2, 2011, 7:51 AM

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Minister for Finance Michael Noonan

Irish families whose homes have been repossessed may be allowed to stay in them in return for giving up ownership and renting it from the state, under new measures currently being considered to address the mortgage debt crisis.

The new proposals were suggested after Irish Finance Minister Michael Noonan was accused of not acting quickly enough as thousands more Irish households fall behind.   

Other options under consideration by the government and Irish financial institutions include allowing people in negative equity to trade up to a new home. But this possibility would depend on their ability to sustain their overall debt after selling their old home at a loss and carrying the previous mortgage 'hangover' with them.
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The number of Irish households in arrears of three months or more is expected to top 60,000 by the end of September, so there is growing pressure on the government to act decisively.  

Minister Noonan told the Irish Examiner he would wait for a government-appointed report at the end of the month before deciding what action to take on the mortgage debt situation.   

Nster.com

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Pittsburghkid | Sep 04, 2011, 09:26 PM EDT

You miss the point. The banks over valued the housing, and forced the price of housing up. It was like a snow ball effect. I know this is hard to follow because people believe that there word is there bond, but they were swindled. The amount of the mortgage should be granted according to the wages, but banks got away from this by over valuing housing. The banks are turning Ireland into a third world country. The banks should admit to over valuing housing, and properly value housing by rewriting the mortgage.

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Scrivner | Sep 03, 2011, 05:04 PM EDT

Done correctly, it would be a lot better than the chaos that the USA has experienced. One should point to the bankers and say,"You broke it, you bought it." Several foreclosures in a neighborhood and suddenly everyone's value goes down. Better to subsidize housing to a little extent.

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casualMBA | Sep 02, 2011, 09:12 PM EDT

If I had bought a 300K euro house, and suddenly found it was worth 180K euros, I would find small incentive to make the next house payment. Hence, the 60,000 mortgages in arrears is not so much a measure of income distress as it is a measure of Value Distress. Given an option 1) to Rent my former home from the Government (foregoing all moneys paid into the house but saving the inconvenience of moving;) or 2) to Buy a 180K euro replacement home; why would I not build equity by purchasing the more modest home? And, why - if I were the Government ultimately holding the mortgage – would I not extend to a percentage of defaulting homeowners (if only for goodwill, public relations, and future electability) the equivalent offer! Towit, purchase the same or comparable home at the newly established market value, at a Sustainable Sales Price and Payment! Where is the Sustainability in “trading up.” It is simply denial of a governmental “write down” of the mortgage losses, Already Incurred!

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Portia777 | Sep 02, 2011, 11:11 AM EDT

What colour is the sky in his world. Money is paper created out of NOTHING.The homes are useless to the banks because no one else is able to buy them in the present situation. This recession was deliberately created. Banksters were bailed out but not the families. Why? Well, we all know why now. Another auto genocide in the making in Eire.

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sirpeter | Sep 02, 2011, 08:55 AM EDT

Another government scam.Those repossessed houses are useless to the banks.They will cost the banks money if they are left empty.Who will maintain them? Who will keep them secure?If nobody falls for that trap they will be forced to renegotiate the terms of the debt.Trading up is another scam.The banks have a load of expensive houses too.They want to off load those if they can.The government don't want to end up housing the thick stupid and single mothers in €600,000 houses at all for free.But use the less expensive houses.Nice try lads.

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