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AIB in write-offs on 100 mortage arrears

Wednesday, March 19 17:14:29

AIB has agreed 100 deals with mortgage holders that have involved some form of debt write-off, according to the Irish Mortgage Holders Organisation (IMHO) this afternoon.

It also said one of the agreements has seen a Cork family get a E195,000 write-off of their debt. The family had borrowed E478,000 and will remain in their home.

The family will now have to service a mortgage of E200,000 and the balance of their borrowings will be warehoused or put to one side.

The deal is believed to be one of the largest mortgage write-downs agreed by the lender.

"There's been a monumental upsurge in activity" related to mortgage debt, the IMHO's David Hall said.

"After six years of banks doing nothing, we have banks doing a combination of good and bad things from repossessions to restructuring deals."

He said his organisation was dealing with just over 2,000 clients from AIB or its building society EBS as well as 360 KBC bank customers.

However, he said hundreds of customers were agreeing debt write-down deals with the bank independently of the brokerages.

AIB recently announced a new split-mortgage product involving some form of automatic debt write-down.

Under the deal, eligible customers will have their loan broken into three tranches.

The first part, which the customer will be expected to repay, will be based on the current market value of their home, while another will be warehoused, interest free, for settlement at a later date, with a final tranche being written off.