Representatives from both Mica Action Donegal and the Mica Action Group have called on the government to engage with banks to support mica affected homeowners with the required 10% contribution.
The two groups met yesterday met with Joe Mc Hugh to get an update on progress on the Mica scheme.
Joe Morgan from Mica Action Donegal also gave Minister Mc Hugh an update on his ongoing engagement with key mortgage lenders across the county and received assurance from Minister Mc Hugh of his support on this issue.
Joe Morgan, Chairperson of the MAD, said: “Councillor Liam Blaney and I have been lobbying lenders in Donegal over the past four to five months on behalf of homeowners who are affected by the defective blocks issue to try to get them to support homeowners in some way towards their 10% contribution.
“We have made representation to the major lenders (i.e. AIB, Bank of Ireland, Permanent TSB, and Ulster bank) and have pointed out the benefits to each of the lenders of supporting homeowners in this scheme.
“Specifically we have asked each lender to offer a range of supports to homeowners, namely: 0% interest loans for fixing homes, restructuring existing mortgages to support zero increase in monthly repayments and importantly in the case of those homeowners who don’t have sufficient money to contribute towards fixing their home, a request to the bank to make up any shortfall in the 10% contribution.
“Reinstating market valuation to Mica properties is of equal benefit to both the homeowner and the lender and secures the investment on behalf of both parties,” he said.
“We are approaching the lenders, based on the principle of dual interest in order to guarantee that all homes can be fixed. The alternative, where homeowners do not have access to funding, is mortgage default and repossession.
“Given the current market valuations of Mica properties, this cannot make fiscal sense.
“Whilst the major lenders have been willing to participate and have been engaged in our meetings with them, they have highlighted Central Bank regulation as a stumbling block towards flexibility in the options they can offer to their customers.
Therefore in the meeting yesterday, we asked Minister McHugh to engage with Minister for Finance Paschal Donohoe to start a dialogue with the Central Bank with an aim of publishing a joint statement supporting unique and extraordinary measures to ensure mortgage defaults and associated repossessions are avoided.
“A recent social media poll indicates almost 60% of existing secured finance on Mica properties is held with lenders where the Irish Government still have a significant shareholding.
“This means that the Government have a responsibility and the necessary influence to support us in this,” he added.
“Indeed, agreement on proposals will not only facilitate the homeowner and the lender but will also avoid a noteworthy impact on the exchequer finances brought about by a significant level of mortgage default.
“The proposed Mica scheme is described as almost operationally ready. However, in my opinion, the scheme will be out of reach of many homeowners who will struggle to find the necessary funding to make up the 10% private contribution.
“Delays in realising the necessary funding will only serve to escalate the funding requirement and therefore increase the likelihood of the homeowner losing their home and the lender and state interest being reduced to next to nothing. Time is of the essence”
“I am delighted that Minister McHugh has committed to a discussion with Minister Donohoe to further this request. Confirmation of a joint communication from The Department of Finance and The Central Bank supporting proposals will significantly influence the level of participation we can expect from lenders in Donegal.”