PTSB will buy stake in distressed houses to aid arrears
PERMANENT TSB will buy a stake in the homes of people who are deeply in arrears as a way of reducing their monthly repayments.
The move would see a distressed homeowner selling the bank some equity in their home as a way of reducing the size of their mortgage.
At some point when the mortgage holder is in a better financial position they may be able to arrange to buy back the stake from the bank.
They would do this by arranging an increase in their mortgage, when they are in a position to pay it.
Permanent TSB boss Jeremy Masding listed this "equity participation" as one of six new options the bank is set to offer to residential customers in trouble with their home loans.
The bank will also offer split mortgages, allowing distressed homeowners to set aside a portion of their debt. But interest will still apply on the portion set to one side.
And it said it would offer reduced payments to those in trouble.
Permanent TSB will also provide negative equity mortgages to those who trade down to a smaller home.
This means they will end up taking some of the negative equity from their original mortgage on to the next loan for the new property.
The bank will also try to get some of those who are behind on payments to agree to a sale of the property -- with the shortfall covered by a personal loan.
Banks are attempting to offer a range of new deals to avoid people declaring themselves insolvent.