Image: David Cheskin/PA.

MORTGAGE HOLDERS WITH the Bank of Scotland in Ireland have had some of their debt written off according to the Irish Independent today.

The British based bank, which included the Halifax brand, shut down its operations in Ireland last year and has admitted that it has been working with customers to “restructure their debt in exceptional circumstances.”

It had previously denied it was doing any deals with customers allowing them to write off some of their debt.

However, Irish Mortgage Brokers has told TheJournal.ie that its unlikely that Irish banks will follow suit.

The Independent reports that Bank of Scotland is doing deal with some buy-to-let property investors, reducing capital owed by some people in negative equity. A statement said:

It is Bank of Scotland policy that mortgage customers are required to repay their debt in full. The bank will, of course, work with customers to restructure their debt on an exceptional basis and when the bona fides need arises. It is bank policy not to discuss individual cases in public forums.

However, Karl Deeter from Irish Mortgage Brokers said that what was happening at Bank of Scotland was a unique case because their buy-to-let portfolio was so small so they could probably afford to do it. He told TheJournal.ie :

This is the exception not the rule which has been made, to a degree, into something bigger than what it is. The buy-to-let aspect of their (Bank of Scotland) portfolio is so small they can afford to do it.

Whether Irish banks will follow suit is certainly a wild card because they have much higher levels of business in this area.  We simply don’t have the capital in our banks at the moment to make the kind of decisions Bank of Scotland have made.

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