THE country’s main banks will have to offer people in mortgage arrears long-term deals or face financial penalties.
The Government and the Central Bank today set out new targets that will see six banks forced to offer deals to lower mortgage payments and keep people in their homes.
AIB/EBS, Bank of Ireland/ICS, Ulster Bank, Permanent TSB, KBC Bank and ACC will have to have offered half of their customers who are in arrears mortgage deals by the end of this year.
These banks account for most of the country’s mortgages.
At least half of the people in arrears at the six banks will have to be offered deals by the end of this year.
Deputy Central Bank governor Matthew Elderfield warned that those who do not co-operate with lenders who offer new deals will face repossessions.
And he said that arrears could keep rising, despite the massive attempt to finally tackle the mortgage arrears problem.
The offers will be aimed at those who are three months in arrears, and will involve both residential and buy-to-let mortgages.
Asked if banks were being told to write off debt, Mr Elderfield said banks could choose to wipe away some of the value of homeowners’ mortgages but the Central Bank was not demanding this.
Banks that do not co-operate will be told to put extra capital aside - an amount equal to what the bank would get if the home was repossessed.