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Homeoptions not-for-profit company aims to help distressed borrowers

A NEW NOT-for-profit company has said it intends to purchase distressed mortgages from Irish banks and offer owners a chance to stay in their homes.

Homeoptions is offering itself as an alternative option to vulture funds for banks to sell distressed loans to.

Speaking at the launch today, founding member Brian Reilly, who is a founding director of Right2Homes, said the company will offer a mortgage-to-rent-to-repurchase structure. This means borrowers would have an option to buy back their property at some point in the future if their circumstances allow for it.  

Owners will not be required to qualify for social housing – one of the key requirements of the State’s Mortgage-To-Rent scheme. Reilly said this will mean Homeoptions can cater for some of the groups of borrowers who currently fall through the cracks of the existing supports.

He said the company is now actively pursuing the purchase of distressed family home loan portfolios offered for sale by Irish banks. 

“We have the same access to funding as the vulture funds have. We also have links to various forms of ethical funding – impact funding as it’s referred to in the States – where they see the benefit in the social dividend from that investment,” he said.

The company expects this funding will come from the US and elsewhere in Europe as well as from inside Ireland and will include investment from pension funds. The funding and asset management functions will be overseen by Irish firm Quartech Solutions, which has experience of managing large loan portfolios.

“We have approached the banks, we have the funders and we’re confident this can be achieved. One of the pillar banks has engaged with us so they’re fairly satisfied we have access to those funds,” Reilly said. 

He said the company will take action against people who do not engage with repayment but said this will only happen following board approval after “comprehensive procedures” have been fully implemented.

New figures from the Courts Service published yesterday revealed there was a 52% decrease in new possession cases year-on-year in 2018. The number of possession orders made has also reduced by one fifth.

However Reilly said the cases involving customers whose loans have been sold in recent years to vulture funds as part of large portfolios are “coming down the tracks”. 

“We haven’t seen those cases come on board yet, you’ll see it this side of Christmas.”

The board will be chaired by Erskine Holmes OBE, founding director the Ulster Community Investment Fund. Other founding members include Michael Durkan, another founding director of Right2Homes, Eve Early, a Right2Homes activist, mental health expert Caroline Lennon-Nally and solicitor Julie Sadlier.

Edmund Honohan, Master of the High Court, has expressed his support for the new model, describing it as a “no-brainer”.

“There’s no other way. The banks should now support this not-for-profit solution. Everyone needs to step up,” he said. 

Fr Peter McVerry also said the scheme was “the most obvious way of dealing with this pending crisis”.

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