Agreement to write €150,00 off AIB mortgage ‘exceptional’

One in four of the deals completed by AIB and the Irish Mortgage Holders Organisation since November involved a debt writedown, it has emerged.

Agreement to write €150,00 off AIB mortgage ‘exceptional’

However, the IMHO has described the agreement by the bank to write off €150,000 from a €400,000 mortgage as exceptional.

It is understood that a married couple with two children had the mortgage on their Dublin home that became unmanageable.

Under the deal, AIB agreed to write off €150,000 of the loan, as well as parking a portion of it on condition that the owners continue to pay capital and interest on around €200,000.

Last November the IMHO began acting as an independent third party in negotiations between AIB and its mortgage holders in arrears.

Since the initiative was launched around 1,700 AIB customers whose mortgages were in arrears contacted the IMHO. The IMHO submitted 550 proposals to the bank and 270 deals were struck. More than 70 involved a new split mortgage, with part of the debt written off.

IMHO director, David Hall, said the €150,000 write-off was an exception.

In some of the cases in which the IMHO was involved there was no write-off while in others the amounts were small, ranging from around €1,000 or €2,000 up to the write-off of €150,000 in the case highlighted.

Under the arrangement made between the family and AIB full capital and interest payments will be made on €200,000, which is double the current value of the property.

Also, €40,000 of the loan will be set aside with no repayment made and no interest accruing on the basis that the family will start making payments on the debt when their circumstances improve.

A spokesperson for AIB said the bank could not comment on the family that had €150,000 written off for confidentiality reasons.

The IMHO’s financial adviser, Stephen Curtis, urged people with mortgage repayment problems to get professional help and not give any more power to the bank than it already had.

He said the case highlighted involved a family with a particular set of circumstances — their income; their ability to pay a mortgage; the value of their property and other eligibility criteria.

Last week the IMHO announced a similar arrangement had been reached with KBC and it is currently in talks with Permanent TSB about offering its services to that bank.

More than 96,000 loans were in arrears for more than three months during the last quarter of last year.

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