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Home Owner Support Scheme In NAMA Legislation

Nama Uncertainty

NAMA Uncertainty

Ireland’s largest, not for profit Housing Association, Respond, believe that up to 25,000 families countrywide face repossession of their homes because of the impact of the present severe economic slump.

Today, many householders in North Tipperary face repossession and a worrying and bleak future without a family home.

At national government level the National Assets Management Agency (NAMA) Bill has passed into its Second Stage and now goes to Committee Stage where amendments to the Bill will be finally decided.

The Fine Gael party have a total of 99 amendments to this Bill and in principal opposed it in its present state.

The Fine Gael amendments to the (NAMA) Bill include a ‘Home-Owner Support Scheme’ and speaking to Thurles.Info today, Deputy Noel Coonan outlined how their Party plan to protect homeowners and taxpayers.

The Deputy Stated:

“It is Fine Gael’s wish to help struggling homeowners through its amendments to the NAMA Bill. If agreed families who face repossession proceedings because they cannot meet mortgage payments will be able to apply to NAMA for support under the ‘Home-Owner Support Scheme’, to be operated by the National Assets Management Agency.
People in dire financial circumstances are continuously visiting my office and looking for help. They are obviously feeling irate at the Government’s NAMA proposal which bails out bankers and developers, the very people whose reckless greed landed us in our current mess.
If the Home Owner Support Scheme amendment is accepted the spectre of expected widespread repossessions can be avoided, NAMA will have an equity share in a portfolio of assets that is being serviced and some social benefit will be seen to flow from NAMA.
Fine Gael is determined that NAMA should be of benefit to homeowners and not just greedy and reckless banks. Our proposals are geared towards patching up as best we can what we believe to be an essentially flawed policy. ” said Deputy Coonan.

So how will the Fine Gael ‘Home-Owner Support Scheme’ work?

This proposed ‘Home-Owner Support Scheme’ would allow NAMA to take an equity share in houses facing repossession, after negotiating a write-down in the existing outstanding debt with the owners mortgage provider.

The home-owners would then service his or her remaining share of the mortgage and also pay a rental fee to NAMA for its share of the property. The home-owner would also have a clear option to buy back the NAMA equity share at any time in the future.

Those who do not meet the eligibility criteria under this scheme would immediately be referred to Local Authorities for alternative housing solutions.

Fine Gael believes there is a clear financial and social logic to ensuring that the extensive residential property portfolio that NAMA will acquire from bankrupt property developers be made available to Local Authorities for use to house families under the Rental Accommodation Scheme (RAS).

In order for a property to be eligible for inclusion in the scheme it must have a market value of less than €750,000, be adequately maintained and insured, be a property mortgaged to one of the participating institution and the person must reside in the property as their main residence.

In making an application under this Scheme, an eligible person would demonstrate the following:

1. That they are at least three months in arrears on the their current mortgage repayments to their participating institution,

2. There has been a material change in their overall financial circumstances since the date of the original mortgage agreement,

3. They have taken all appropriate financial advice on every option available to them in their attempt to repay their outstanding loan.

4. They are in a current position to service at least one-third of their previous mortgage obligations, at current interest rates, out of 50% of their net income.

5. They have made reasonable efforts to agree an alternative repayment schedule with their participating institution.

6. They have not availed of the Scheme previously.

Some of the other amendments to the NAMA Bill proposed by Fine Gael include a proposal to abandon the payment of the so-called long term economic value for the loans taken on from the banks and the suggestion that the risk of NAMA could be shared more fairly by the State taking a bigger equity stake in banks, and in exchange giving an equity share in NAMA to the banks and their bondholders.

Fine Gael also wants a discoverable register created and made easily available, latter listing every non-performing loan taken on by NAMA, together with the establishment of an Oireachtas Committee which has the backing of a new section in the Comptroller and Auditor General office, that would fully oversee NAMA’s day to day operations.

Give us your views on NAMA, in confidence; we would like to hear from you. See the ‘Leave a comment‘ tab under this post.

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