An organisation representing distressed mortgage holders has said there is great cause for concern about the strength of the Code of Conduct on Mortgage Arrears, following a High Court judgment this morning.
David Hall, of the Irish Mortgage Holders Organisation, made the comment, following a ruling by the court that if a mortgage provider had not signed up to the voluntary mortgage-to-rent scheme, then it did not have to offer the scheme to distressed borrowers.
Mr Hall was representing a couple with five children who have fallen into arrears with the mortgage on their Dublin home.
The family wanted to be put forward for the Government backed mortgage-to-rent scheme, when other alternatives to allow them to keep their home, had failed.
Under this scheme a private housing agency would buy the house at market value and the family would become tenants of the agency.
However, the couple's mortgage is with Stepstone Mortgage Funding Limited, who say they do not participate in the mortgage-to-rent scheme.
The company says it has a pilot scheme in place with ten borrowers to allow it to assess whether it would reconsider getting involved in the scheme.
A director of Stepstone, Richard Harper, told the court the scheme was extremely complicated, costly and was almost unworkable.
The court heard that out of almost 2,500 families nominated for the scheme overall, only 38 deals have been completed and Bank of Ireland and AIB have completed only one transaction each.
Mr Justice Michael White found there was a conflict of facts before the court as to whether Stepstone had signed up to the scheme or was merely involved in a pilot programme.
He said if Stepstone had signed up then it had to offer the scheme to the couple.
If it had not, he said the couple could not resist an order for the possession of their home.
He adjourned the matter for two weeks to allow Stepstone to produce evidence to show that it was a pilot scheme.
Afterwards Mr Hall said he hoped the couple would appeal the decision to the Supreme Court.
He said they were very anxious about losing their home.
He said the decision showed the mortgage-to-rent scheme was purely voluntary and could only be availed of by borrowers if they were offered it by their lender.
In a statement, Stepstone Mortgages Ltd said it had a policy of not discussing the details of any individual cases.
The company said it greatly sympathised with customers who fall into payment arrears and worked very closely with all customers to ensure the most appropriate arrangements are put in place.
It said it maintained a dedicated team based in Dublin managing this borrower contact and assisting any borrowers who find themselves in arrears.
It said that, when all alternatives have been exhausted, in some cases the most appropriate course of action was to seek possession.
In these circumstances, it said Stepstone followed approved legal routes and aimed to ensure the process was as compassionate and collaborative as possible.
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