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Arrears

News of 100 mortgage write-downs shows crisis 'akin to Russian roulette'

“One bank’s sustainable solution could be another bank’s unsustainable mortgage leading to repossession proceedings,” Fianna Fáil’s Michael McGrath said today.

THE IRISH MORTGAGE Holders Organisation (IMHO) has said that AIB has agreed 100 deals with homeowners involving some kind of debt write-off.

The organisation has also said that one agreement saw a family in cork get €195,000 of their loan written down. This follows news earlier this month that AIB wrote off €150,000 of a €400,000 mortgage to allow a family to stay in their home.

Commenting on the news today, Fianna Fáil’s Michael McGrath said it has brought into sharp focus the need for greater consistency in how mortgage arrears cases are handled across the different banks. He said that if a person is in mortgage arrears “the outcome you will get from your bank seems to be akin to Russian roulette”.

The TD was critical of Bank of Ireland, which does not support debt forgiveness like AIB has been doing through these agreements. “One bank’s sustainable solution could be another bank’s unsustainable mortgage leading to repossession proceedings,” he said. “For borrowers in difficulty with their mortgage, whether or not they are allowed to keep their home really shouldn’t come down to a game of poker in this way.”

McGrath also said there is a “lack of consistency” in the Central Bank’s code of conduct on mortgage arrears because it requires banks to explore a list of repayment arrangements without reference to any standardised criteria.

Last month the special liquidators appointed to manager IBRC operations said bidders for the mortgage book will sign up to the code of conduct, thus protecting families. McGrath put forward a bill on the topic, aimed at offering further protection to mortgage holders after criticism of the voluntary nature of this kind of agreement and the lack of formalised standards.

However Minister of State Fergus Dowd said at the time that “considerable protections already apply to people who are in mortgage difficulties”.

Read: AIB writes off €150k to allow family stay in home>

Read: ‘Considerable protections already apply to people who are in mortgage difficulties’>

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