Permanent TSB sees up to 2,000 customers moving to mortgage-to-rent

Bank identifies up to 1,000 borrowers for debt forgiveness

Permanent TSB: Expects up to 2,000 customers will avail of ‘mortgage-to-rent’ scheme. Photograph: Nick Bradshaw

Permanent TSB: Expects up to 2,000 customers will avail of ‘mortgage-to-rent’ scheme. Photograph: Nick Bradshaw

 

Permanent TSB expects up to 2,000 troubled home loan holders to avail of a mortgage-to-rent scheme it is working on with a “preferred partner” and set to be launched in the coming months, according to the bank’s director of operations, Shane O’Sullivan.

Speaking at an Oireachtas finance committee meeting, Mr O’Sullivan also said that the bank has identified up to 1,000 struggling buy-to-let borrowers to avail of a recently-announced plan to offer to forgive any arrears or shortfalls on a sale of a property if they agree to a voluntary surrender.

So far, the bank has written to 600 of these customers and it expects “a lot” of these to take up the offer.

This week, AIB became the first Irish bank to launch an enhanced mortgage-to-rent scheme following a move by the Government this year to modify a previous plan that had limited take-up in recent years.

The bank is working with the debtors advocate David Hall’s Irish Mortgage Holders Organisation (IMHO) and new iCare Housing company.

Under the scheme, AIB will give iCare €100 million to buy properties, which will be rented back to families who forfeit ownership of the homes, and who qualify for social housing, in return for a long-term lease.

Under the plan, the customer’s residual mortgage debt, following the property sale, is fully written off.

Mr O’Sullivan didn’t identify PTSB’s “preferred partner” for the mortgage-to-rent blueprint it is working on.

Meanwhile, PTSB has revealed that its level of overcharged mortgage borrowers on rates that track the European Central Bank has risen.

PTSB was the first Irish bank to identify overcharging in its loan books, when it disclosed in July 2015 that 1,372 customers had been affected as the bank wrongly denied them their contractual rights to an ECB tracker rate, typically after a period on a fixed rate.

Ger Mitchell, a senior PTSB executive who is in charge of the review, said that 98 per cent of these customers have been redressed and compensated, though 247 individuals subsequently lodged appeals against the bank’s remediation plan. Some 67 of customers’ cases were upheld by two independent appeals panels.

Meanwhile, Mr Mitchell said that the bank has identified 579 additional cases of tracker mortgage overcharging, as part of a review which the Central Bank ordered the State’s lenders to carry out in late 2015. That’s up 182 such cases that it had found as of the end of March, according to previous correspondence with the Oireachtas committee, which The Irish Times reported in June.

Mr Mitchell said that PTSB aims to have the additional customers “remediated fully before the end of the year”.