MORE than 130 homeowners in Laois face the prespect of eviction because their homes could be reposessed by Laois County Council, a Laois Offaly TD claimed this week.
The situation that has caused Brian Stanley to call on the Government to address the issue of distressed mortgages and loans taken out through local authorities. During the boom Laois and other councils sold affordable houses. The mortages were arrange through the councils.
“Many of the people who took out these loans are now unemployed and caught in a trap of huge negative equity. This problem is now escalating. In Laois for example, out of a total of 514 loans, there are 136 loans in arrears of three months or more. If these houses are repossessed and people are evicted, it would cause a range of problems,” he said.
The TD criticised a system that sees houses boarded up for months and then sold for less than half the original price, leaving both the householder and the local authority with a negative equity loan debt. The families that are affected then have to be given rent allowance and join the local authority social housing waiting list, which in turn is putting huge pressure on local authorities.
“Measures need to be put in place to address this situation, such as burden sharing, local authorities taking ownership and renting back to the lender, interest repayments only or deferral of repayments,” Dept Stanley continued.
“In the case of shared ownership loans, immediate relief can be sought through reducing the rent on the portion of the home that the local authority owns or the 50 percent of the house that’s being rented. Instead, rent on this portion is increasing at 4 percent per year.”
Although there is an inter departmental review group in place to recommend change, Dep Stanley said this provides no outcomes and no solutions.
“No local authority should evict anyone with a local authority loan. Making these people homeless means that the local authority will have to rehouse them anyway. This issue will not resolve itself and the Government must act immediately,” he said.