In October 2017, the Government established the Abhaile project under the remit of the Citizens Information Board. This project increased funding to MABS (the State’s Money Advice and Budgeting Service) existing mortgage supports in place since September 2015; continued to fund the Accountants’ service, put in place in October 2017; and funded a new voucher system for borrowers in late-stage mortgage arrears to access a Personal Insolvency Practitioner for one meeting to determine eligibility for an insolvency arrangement or a Solicitor for legal advice as well as a system of Court Mentors at repossession hearings across the country.
According to the Fifth Report of the Abhaile Scheme, some 17,299 Personal Insolvency Practitioner (PIP) vouchers were issued between mid-2016 when the Scheme began and December 2021 (p.24). It should be noted here that PIP vouchers are provided per borrower, not per mortgage, and so the number of mortgages involved is less. Of these, 12,669 have been presented for payment. At €500 plus VAT of 21 per cent per voucher, this equates to a value of €7,664,745 redeemed out of a possible €10,465,895. A breakdown of the outcomes for the 12,669 borrowers who presented their PIP Vouchers for payment (p.30). Just 25 per cent were granted a Personal Insolvency Arrangement (PIA) (n=3,158); a further 11 per cent entered into an informal solution with their lender (n=1,403), either an Alternative Payment Arrangement (ARA) or Mortgage to Rent (MTR); and just 1.5 per cent were made bankrupt (n=202).
So, for €10.4 million, less than half of all borrowers who presented their PIP voucher for payment (n=6,249, 49 per cent) had accessed or were in the process of accessing an insolvency solution. The 3,430 (27 per cent) who accessed or were in progress towards an informal solution could have achieved the same result by accessing MABS’ free money advice supports without the need or expense of a PIP. The recent addition of the Dealing with Debt website from the BPFI to the space simply signposts visitors to the site to existing supports.
Mortgage to Rent
Since its introduction in 2012, only 2,130 households have availed of the scheme out of a total of 6,750 cases (31 per cent) and a further 560 are being progressed. Mortgage to Rent does not serve all counties equally. Counties Sligo, Roscommon, Leitrim, Galway City, Monaghan and Longford have all had less than 100 successful cases. Mortgage to Rent has been reviewed twice, the first time in February 2017. Following that review, one of the main outcomes was the introduction of a new funding model, using private equity. Private equity vehicles are, by their nature, profit driven and without tight regulations and buy-back options for the State, Mortgage to Rent tenants may fall foul of market fluctuations. The second review took place in February 2021 and resulted in welcome improvements to the eligibility criteria, including income limits, equity limits and size of the property. These improvements will no doubt help support some households, however based on the last ineligible cases summary report from the Housing Agency, 341 cases were ineligible on the grounds that the household was either over or under-occupied. The changes to this element announced in February 2021 apply only to borrowers aged 65+ or where there’s a disability in the household. There is no evidence in the 2021 review that this will have a significant impact on the numbers eligible. Of the 6,750 applications for Mortgage to Rent, 4,060 were ineligible or terminated during the process.
Both Personal Insolvency Arrangements and Mortgage to Rent will work for some households, but there are still many in long-term arrears for whom there is little support.