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Ethical fund buys distressed AIB mortgage portfolio​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

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A portfolio of distressed AIB mortgages has been sold to an investment consortium that describes itself as an ethical fund.

There are around 620 owner-occupier mortgages in the bank’s Project Iris portfolio which have been in arrears for a number of years.

They have been acquired by a group that includes Home for Life, an Irish private company that operates mortgage-to-rent deals for financially distressed homeowners.

The consortium has promised to come up with borrower-friendly solutions for those whose mortgages have been sold.

Called the Home Solutions Initiative, the consortium is made up of debt collection agency Everyday Finance, Arizun Asset Management (Ireland) and London-based investment group LCM Partners as well as Home for Life group.

Last year, Home for Life raised €75m from LCM Partners saying the funding would allow it to raise up to €160m more through an existing deal with AIB.

Home for Life’s securing of the portfolio means mortgage campaigner David Hall’s bid has failed. He had funding from UK debt investor Arrow Global.

AIB’s Project Iris portfolio contains around 620 owner-occupier mortgages in long-term arrears.

The bank was anxious to sell to a group that would keep as many borrowers in their homes as possible.

Up to now, it and other banks here have been selling distressed mortgages to vulture funds.

The mortgages had an original book value of €150m. The discount involved in the sale was not disclosed.

The majority of the mortgage holders first entered default over five years ago.

Most of the households are expected to end up in the Government’s mortgage-to-rent scheme where ownership of the house is given up and the family becomes social housing tenants. Mortgage holders who qualify have their debts written off.

Many of those suitable for the scheme are in vulnerable circumstances due to issues such as family break-ups or, increasingly, because they are approaching retirement age with large debts that they’ll be unable to pay on a State pension.

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Before the AIB sale went ahead, distressed mortgage holders were given a chance to engage with the bank and strike a restructuring deal which would mean their loans would not be sold.


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