Hundreds of deals expected under mortgage initiative

Between 300 to 400 deals a month are expected to be struck through a new initiative to assist AIB customers with distressed mortgages.

The initiative, which comes into operation later this month, will see the Irish Mortgage Holders Organisation (IMHO) act as an independent mediator between the AIB Group (which includes EBS and Haven) and customers seeking a permanent restructuring of their mortgage.

Speaking at the launch of the initiative this morning director of the IMHO David Hall described the new arrangement as "groundbreaking" and a "significant alternative to people who are in difficulty".

“The objective of this exercise and this joint initiative between ourselves and AIB Group is to ensure that borrowers have an open, independent opportunity to engage with a lender and to seek a long-term sustainable solution to allow people to stay in their homes.

“The objective here is very simple and that is to keep as many people in their homes as possible,” Mr Hall said.

Under the new code of conduct in mortgage arrears, launched in July, banks are compelled to take action against borrowers who have not engaged with their financial institutions.

Mr Hall said the new initiative was aimed at those reluctant to engage with the banks by offering them “a real opportunity to engage and find solutions in an independent and impartial way”.

“This is their chance to seek an alternative solution with their lender without having to go through the insolvency service,” he said.

Head of financial solutions group at AIB Brendan O’Connor said the AIB had between 8,000 and 10,000 customers who had not provided the bank with a Standard Financial Statement (SFS), something required by the bank to restructure a client’s mortgage debt.

“We cannot assess somebody for a sustainable solution unless we have an SFS,” Mr O’Connor said.

“We recognise that some of our customers are reluctant to deal with the bank directly and view this initiative as a means for people to seek free help and advice from an independent party as part of the resolution process,” Mr O’Connor said.

Mr Hall said the new arrangement would be operated from a standalone independent office manned by five staff in the same building as the IMHO’s existing offices will be grant-aided by AIB for a six-month pilot project with an estimated cost of €150,000.

“It will not have any influence other than that. I nor any of my colleagues as directors of the IMHO will receive any remuneration for the project nor will we receive any expenses for the project,” Mr Hall said.

This service will be operational from Monday, November 18th. Further information available on the IMHO website at www.mortgageholders.ie.

Figures by the Department of Finance released last week showed that three quarters of mortgages over three months in arrears at Ireland’s six main lenders had yet to be restructured.

The figures covered 699,764 mortgages at AIB, Bank of Ireland, ACCBank, Permanent TSB, KBC Ireland and Ulster Bank, which between them account for 35 per cent of the homes in the State.

Of 82,624 mortgages in arrears of more than 90 days, just under 25 per cent had been restructured, while 62,210 or 75.3 per cent had not been restructured.