The Dublin-based investment management firm is part of a consortium, named Home for Life, which is in talks to secure key funding from a large international investment fund as well as other overseas and Irish backers, according to sources. The group has sought advice from insolvency experts, organisations that help distressed borrowers, including the Phoenix Project, the Housing Agency and banks in the past year as it advanced the plan.

A spokesman for Merrion Capital declined to comment.

Merrion Capital Group jobs in Ballsbridge, Co. Dublin, Ireland

The revised plan will see increased involvement from private financial firms, which would buy batches of defaulted loans from banks at deep discounts to their original value and then lease the homes back to the State. To qualify, borrowers would have to be eligible for social housing. They would see their mortgages written off in exchange for ceding ownership of the property. The borrowers would then be given a year guaranteed lease, with an option to extend it for a further 20 years.

The Merrion Capital consortium is one of a number of groups expected to emerge in this space in the coming years.

Merrion's €, minimum investment for wealth clients

Mortgage campaigner David Hall has also established an organisation, called I Care Housing, to do something similar. The latest figures from the Central Bank show 56, owner-occupier mortgages were at least three months in arrears at the end of September.

More than 34, of these were more than two years behind in payments. While Government sources said borrower take-up in the initial stages of the improved scheme is likely to be around the 6, mark, industry figures suggested more than 40, borrowers in trouble could ultimately be eligible.

The Merrion Capital-led plan would involve banks pooling batches of soured loans and having the borrowers assessed by the Housing Agency to see if they qualify for social housing.

The banks, in turn, would inform borrowers, who are typically deep in arrears and either involved in or facing legal action, if they were eligible for the mortgage-to-rent scheme. In most instances, the banks would already have written down the value of the mortgages on their own books to below the going market price, to account for legal and other costs associated with potentially seizing, maintaining and selling the properties. Initial transactions would take months to execute as the finer details are worked out between various parties involved.

Financial investors in the homes could receive a rental yield of about 5 per cent at a time when Irish year government bonds are yielding a little over 1 per cent, according to market sources.

The new owners of the properties may also be able to refinance their investment at a later stage by selling bonds in the financial markets where interest payments would be funded by the rental income from the homes, they said.

As the State would be paying the rent, such bonds would appeal to conservative investors such as pension and sovereign wealth funds. Data Privacy Tech Tools Work Businessperson Awards Commercial Property Construction Comment Columnists Innovation Specials Panama Papers Entrepreneur of the Year AIB Start-up Academy Podcasts Business Podcast Partner Sites Top By using this website, you consent to our use of cookies.

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Joe Brennan , Fiach Kelly. Eligible To qualify, borrowers would have to be eligible for social housing. Read More Housing crisis: Real news has value.

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Stockbroker Merrion Capital is laying off staff

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