PTSB mortgage holders in arrears face shorter Covid-19 payment breaks

Permanent TSB is holding back from offering mortgage holders already in arrears the full standard three-month mortgage payment break that banks in the Republic are making available to borrowers affected by the coronavirus crisis.

PTSB is only offering an interim arrangement of two months’ payment holidays to home loan borrowers who were already in arrears, or not meeting the terms of loan restructuring arrangements, pending the completion of detailed forms outlining their financial affairs.

Customers of the bank that have had problems in the past but are meeting restructured terms are not required to fill out a so-called standard financial statement (SFS), a detailed form on monthly financial incomings and outgoings, to avail of a holiday break, according to a company spokeswoman.

“For customers who are not meeting the terms of their agreed restructuring arrangement, they will be required to complete an SFS,” she said.

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The extent of the economic fallout as a result of the spread of coronavirus was underscored by the fact that 283,000 people had applied for Covid-19 emergency income payments from the Department of Social Protection by the end of last week, while more than 16,000 companies had applied for a wage subsidy scheme.

Mitchell O'Brien, a Waterford-based personal insolvency practitioner (PIP) with IRS Ireland, said that requiring borrowers to fill out standard financial statements in the current environment is meaningless, as individuals who have lost their jobs or been otherwise affected by Covid-19 are not in a position to outline their near-term prospects.

“What can you credibly put into an SFS in this situation,” said Mr O’Brien, who is obliged to have due regard for both debtors and creditors as a PIP.

Three-month breaks

Mr O'Brien said that loan-servicing firms such as Mars Capital and Start Mortgages, a unit of US private equity giant Lone Star, that have acted for many overseas buyers of distressed loans in the past decade, are offering three-month payment breaks to borrowers without major questions.

However, borrowers indebted to Promontoria, an entity owned by US distressed-debt group Cerberus, face detailed requests for documentary evidence of their financial circumstances when seeking payment breaks through the firm's loan-servicing agent, Link Group.

Almost 90,000 owner-occupier loans and about 21,000 buy-to-let mortgages are in the hands of non-bank lenders, according to Central Bank data.

This is mainly a result of banks such as Danske Bank and Bank of Scotland retreating from the Irish market in the wake of the crash and selling their loan portfolios, the liquidation of Irish Nationwide and, more recently, moves by surviving Irish banks to shift non-performing loans off their balance sheets.