Equity release company Home Plus and Mars Capital have launched a shared ownership product to resolve mortgages that are in arrears and under threat of legal enforcement.
Mars Capital said it is prepared to work proactively with arrears customers and will seek lender engagement to determine the most sustainable solution on a case-by-case basis.
Mars Capital is owned by UK specialist debt lender Arrow Global Group.
Where home reversion is deemed to be an option, Home Plus will offer a proposal to the borrower that will clear their existing mortgage and arrears in full, allowing them to remain in their home.
As part of the agreement, Home Plus will take ownership of a portion of the property and will agree with the homeowner a monthly payment.
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The percentage share of the home which Home Plus will buy, as well as the amount of the monthly payment made by the homeowner, will depend on a variety of factors including age, gender, life expectancy of the homeowner, and the market value of the property.
The initial proposals will respond to over €4m of problem debt and will provide solutions to c. 30 borrowers and families. The companies said this will be followed with additional proposals throughout the country in the weeks and months to come.
Ian Higgins (pictured), CEO of Home Plus, commented: “Home Plus and Mars Capital are working to be ambitious in the sustainable resolution of debt while providing a whole of life solution to individuals who may be excluded by the wider financial services industry because of age, income or other grounds.
“While this option suits the needs of many people who are over the age of 55 and are in arrears on their mortgage, we will always ensure that our customers speak with a qualified financial advisor beforehand, to make sure this is a good option for them and to encourage that they obtain relevant legal advice.”
Colin Maher, CEO of Mars Capital, stated: “Mars Capital is firmly committed to obtaining good customer outcomes and working with all stakeholders in resolving the long-term mortgage arrears problem in Ireland.
“This includes actively working with customers and their advisors on alternative solutions such as home reversion to allow customers to remain in their homes.”
Home Plus launched its home reversion product in the Irish market in September 2021. Home reversion allows a homeowner to sell a share in their home, typically in a range from 20% to 70%, in exchange for a lump sum.
As part of the transaction, the homeowner retains the remaining share of their home and continue to live there for the rest of their life, or alternatively until they enter long term care.
