AIB offers customer return to repossessed home

Bank admits error that led to repossession nearly three years ago in tracker mortgage review

AIB has been reviewing records under Central Bank supervision since the end of 2015. Photograph: Cyril Byrne

AIB has been reviewing records under Central Bank supervision since the end of 2015. Photograph: Cyril Byrne

 

AIB is offering to allow a family back into their repossessed home following an examination of the case in the bank’s tracker mortgage review.

The bank repossessed the home around the start of 2015 and it has lain vacant since that time. Now, in a letter to the former homeowner, it says, “you could have the opportunity to regain possession of the property”.

And, if the owner is neither interested in doing so, or unable to fund such a move, the bank says it will fully clear any remaining mortgage debt after selling the home.

The property, in the south of Ireland, is one of 14 identified by the bank in its review of tracker mortgages as having been repossessed in error. The review covers mortgage-holders who were wrongly denied the option of a tracker mortgage rate and others who were offered a rate but were overcharged on it.

David Hall, of the Irish Mortgage Holders Organisation, who represents the former AIB customer holder, has said he will be meeting the bank to discuss the options available on the property.

There is no mention in the letter for compensation for the hardship suffered by the customer over the loss of the property. The bank has written to the former homeowner twice in recent months but gives no explanation as to why it has taken so long to identify that his home was repossessed in error.

Reviewing records

The bank has been reviewing records under Central Bank supervision since the end of 2015.

In its letter, AIB outlines three options for the homeowner – two of which would see the customer regain control of the property.

The bank said the customer could return a standard financial statement and supporting documents in order to be assessed by the bank for a “suitable repayment arrangement on your corrected mortgage balance”.

Alternatively, it said, he could pay it the open market value of the property, “in which case it would clear any remaining balance on your mortgage account along with any account exclusively secured by the property under our control”.

The third option “if you do not wish to regain possession of the property, or if a suitable repayment arrangement is now available” would see the bank selling the property, setting the net proceeds of the sale against the outstanding mortgage balance “and clear any remaining balance” on the mortgage account and other related accounts.

Repossessed in error

Mr Hall says the letter raised the issue about what other banks had done with the properties they repossessed in error as a result of the tracker mortgage scandal.

“Bad as this is, the bank is at least doing something. Many of the others have yet to start,” he said. “AIB has offered the house; others might have offered €50,000 and still have the house.”

He is calling on other banks that have repossessed properties to clarify whether they are still under their control or have been sold off.

Permanent TSB has confirmed that 22 people lost their homes as a result of the scandal and said the number might yet rise by a further 10.

Ulster Bank said initially that 15 customers were affected by repossession but it has since clarified that the number will be lower.

KBC and Bank of Ireland, which only started issuing numbers last week under pressure from Minister for Finance Paschal Donohoe, have yet to clarify how many, if any, of their customer lost their homes as a result of mistakes by the banks.