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Bank lifeline for homeowners failing to pay mortgage

PEOPLE who can no longer meet the repayments on their mortgages are to be offered funds and advice on selling their homes.

Pepper, the Australian lender that took over the mortgages of GE Money, has written to its customers offering them the new deal. The lender, which has been writing off homeowners' debts, will help pay up to €250 towards the cost of legal advice, and the same for independent financial advice.

It is understood that the balance owed after the house sale could be written off for borrowers who co-operate.

People who take up the deal will also be offered funding for the auctioneers' fees and financial support and advice on finding new accommodation, the Irish Independent understands.

The new scheme is being presented as an alternative to repossession for homeowners who are in financial trouble.

Australian-based Pepper Home Loans bought over the mortgage book of GE Money last year. It took over €600m-worth of loans on 3,500 mortgage accounts.

'UNSUSTAINABLE'

The purchase price was not revealed but reports indicated it was in the region of €330m. The discount paid for the mortgage book means Pepper is in a position to write off some debt.

A letter sent to customers and seen by the Irish Independent shows that the Australian lender is now offering what it calls its assisted voluntary scheme to those whose mortgage accounts are considered "unsustainable".

The letter states that Pepper will obtain two valuations of the property to establish a market price and a lowest recommended selling price which will be agreed by the customer.

Customers will remain in their house until it is sold. They will also receive a relocation assistance package. Pepper said in the letter it would review any remaining shortfall due on the mortgage after the sale on a case-by-case basis.

Pepper Ireland boss Paul Doddrell commented: "This new scheme provides an alternative for borrowers who regrettably have found themselves in significant financial difficulties and whose mortgages are unsustainable.

"It's important to stress that this solution is only appropriate for certain customers."

Irish Independent