Dáil Éireann Debate, Tuesday - 19 January 2010
884 Deputy Caoimhghín Ó Caoláin asked the Minister for the Environment, Heritage and Local Government if he will review the arrangements which compel persons who purchase a home from their local authority under the affordable housing scheme to purchase mortgage protection insurance from the local authority, often at a more expensive rate than is available elsewhere. [1520/10]
View answer885 Deputy Caoimhghín Ó Caoláin asked the Minister for the Environment, Heritage and Local Government if he is satisfied that the mortgage protection scheme provided by local authorities, which is mandatory on persons who purchase a home under the affordable housing scheme, is operated in a fair manner; if he will review the tendering process which awards the contract for the protection scheme to one company in view of the fact that many consumers could find more competitive rates elsewhere if they were permitted. [1521/10]
View answerI propose to take Questions Nos. 884 and 885 together.
The local authority mortgage protection insurance scheme is overseen by the Mortgage Protection Committee which is a sub-committee of the County and City Managers association (CCMA) and is representative of the CCMA, local authorities, the Housing Finance Agency and my Department.
Participation in the mortgage protection insurance scheme is compulsory for local authority house purchase loans for social and affordable housing. In terms of comparison to other schemes of mortgage protection, it is important to note that it covers disability as well as death. The Mortgage Protection Committee which oversees the scheme endeavours to achieve a balance between the most economic rate to be charged for the scheme and the benefits provided.
The Mortgage Protection Committee held a tender competition in 2008 which resulted in the introduction of a new scheme as of 1 January 2009. This new scheme contains a number of significant new benefits, including incorporation of the rental portion of shared ownership, as well as a lower premium for borrowers. The operation of the scheme is monitored closely on an ongoing basis by the Committee.
886 Deputy Caoimhghín Ó Caoláin asked the Minister for the Environment, Heritage and Local Government if his attention has been drawn to the fact that Monaghan County Council previously informed mortgage holders that they were permitted to seek alternative mortgage protection cover at more competitive rates, and that this permission has since been revoked; if he is satisfied with the manner in which this was handled by the local authority; and if he will make an order allowing these families to revert to the cheaper policy. [1522/10]
View answerI understand that the error involved came to light when the revised Mortgage Protection Insurance scheme was introduced on 1 January 2009. At that time, 15 borrowers were identified as having received incorrect information from Monaghan County Council and were now outside the insurance scheme. The Council informed the borrowers concerned and these borrowers have now been given the option of rejoining the scheme, thereby enjoying the fuller range of benefits that it confers. Those who opted as a result of the administrative error to take on alternative cover and who wish now to remain outside the scheme must obtain mortgage protection insurance and their insurer must notify Monaghan County Council on an annual basis that adequate cover is in place.
