Property & Mortgages

Monday 28 July 2014

KBC joins with mortgage arrears group to keep families in homes

Charlie Weston, Personal Finance Editor

Published 04/03/2014|02:30

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David Hall, founder member of the Irish Mortgage Holders' Organisation, which helps people in arrears on their home loans.

A GROUP supporting mortgage holders in arrears has linked up with a second bank in a bid to keep families in their homes.

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The Irish Mortgage Holders Organisation (IMHO) will provide free advice for customers in arrears at KBC Bank, the Irish Independent has learned.

The group is in talks with Ulster Bank and Permanent TSB about offering similar services to financially distressed customers of these banks.

At the end of last year, AIB engaged the David Hall-headed IMHO to offer a third-party, independent advice service for mortgage arrears customers of AIB and EBS.

The latest move comes ahead of new figures due out today from the Central Bank that are expected to show that 98,000 residential mortgage accounts were three months or more in arrears at the end of December.

This is a slight fall from the total behind on their payments at the end of September.

KBC Bank is providing €80,000 to the mortgage body to run a third-party office to advise the bank's distressed mortgage holders, Mr Hall confirmed.

This is expected to fund two staff members in the IMHO Dublin offices, a dedicated phone line and computer system.

DEFAULTERS

The move is an attempt by the Belgium-headquartered bank to get arrears customers to engage with it through Mr Hall's organisation.

There will be a particular emphasis on those who have not returned a standard financial statement (SFS), which means the bank can't work out what they can afford to repay.

Some banks have labelled those who have not returned a SFS as strategic defaulters, but others have argued that the form is complex to fill out.

And it has emerged that KBC Bank has put in place attractive deals for those in arrears.

It offers to cut the interest rate to as low as 0.5pc for those who genuinely can't make the repayments.

And it charges no interest on the portion of a mortgage that is set to one side for those given a split mortgage. Mr Hall's organisation announced last November a link up with AIB to run a third-party body to advise distressed mortgage holders of that bank.

It has so far done 200 deals, including getting some mortgage debt written off.

The new KBC service will be the same as the AIB one – it will be free, confidential and independent of the bank.

Known as the mortgage holders' "champion", Mr Hall is understood to have been in talks with Ulster Bank and Permanent TSB for a number of months now about putting similar arrangements in place.

The IMHO is seen as independent, with a strong pro-consumer bias.

Banks recognise that people who refuse to respond to them may end up engaging again through the IMHO.

However, Mr Hall has warned in the past that not everyone in mortgage trouble will get a deal to lower their monthly repayments, and some will end up having their homes repossessed.

Irish Independent

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