THOUSANDS of homeowners burdened with rapidly mounting mortgage debts have been given a ray of hope, with news that some lenders are agreeing to take back properties without expecting the distressed owners to pay off the balance of their loans.
Details obtained by the Irish Examiner show that five mortgage holders have had their loans written off in recent months, after agreeing to move out and give up their homes.
Another four cases are progressing and nearing final stages of agreement.
The unprecedented deals reached between lenders and lawyers acting for distressed borrowers have so far amounted to write-offs of more than €2.2 million for just seven borrowers.
Lawyers with the support group New Beginning, which negotiates on behalf of owners facing repossession, have revealed how they have told lenders in several cases it was pointless to pursue some of the debts owed to them.
The group has said it is “quietly confident” of successfully negotiating the write-off of mortgage debts in another 25 to 35 cases. So far, loan sums ranging from €186,000 to €295,000, taken out mainly between 2007 and 2009, have been written off by banks, once the properties had been handed over to lenders.
In one case, lawyers are in the final stages of agreeing the write-off of a €780,000 Dublin mortgage.
The deals come as pressure mounts on the Government to consider a national debt relief scheme, backed by taxpayers.
However, the Coalition seems split on recent calls by economists for €5 billion to €6bn to be made available to help hard-pressed mortgage-holders.
Labour’s Housing Minister, Willie Penrose, said such a fund should be considered but Fine Gael Junior Finance Minister Brian Hayes said the idea was unrealistic.
However, New Beginning co-founder David Hall explained how the Government would soon have to face the fact that “people who can’t pay, can’t pay”.
He added: “Those who have been able to walk away from the mortgages are a mix of professionals, of people with failed businesses and also of failed relationships. For those people who can’t pay, this [debt relief] is the only real solution going forward.”
The Irish Banking Federation, which represents main lenders, last night said banks continued to take a “realistic approach to supporting borrowers under pressure” on a case-by-case basis.
News of the debt-relief cases comes as the Central Bank prepares to release the latest figures on mortgage arrears and repossessions this week. The data for the second quarter is expected to show a rise in the number of restructured mortgages and the number of homeowners falling behind with mortgage payments.
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