Saturday 24 February 2018

Bank's 'solution' was threatening letters

Donal O'Donovan

Donal O'Donovan

A SECOND bank has been criticised after it emerged that the majority of "solutions" offered to customers in mortgage arrears involved letters threatening repossession.

Ulster Bank boss Jim Brown said his bank was well ahead of the Central Bank target for tackling homeloans in arrears.

But he was criticised by TDs and senators after figures he presented showed that more than 80pc of solutions offered to home owners in long-term arrears were solicitors' letters threatening repossession.

It followed AIB saying it has issued 5,900 such letters to customers. AIB had counted this as part of the debt restructuring offers to 8,600 customers in the three months before the Central Bank's June deadline.

Ulster Bank said it counted such letters as part of its mortgage debt solutions.

Bank of Ireland's Richie Boucher and Mr Brown appeared before the Oireachtas Finance Committee on the second day of a three-day series of hearings with the heads of the main lenders.

Both men said their banks had beaten targets to get to grips with mortgage arrears.

But they also confirmed a massive step up in the number of legal actions being taken against homeowners.

Bank of Ireland did not count any type of letter threatening repossession as being part of its figures for mortgage solutions.

At the end of March, 11,774 of Bank of Ireland's owner-occupier mortgages were three months or more in arrears.

The target was for all lenders to make offers to 20pc of customers by the end of June and BoI said it had offered a deal to 27pc, or 3,603 customer accounts.

The offers include a variety of reduced-payment deals such as interest-only, capitalisation of arrears and some split mortgages. But on top of this, solicitors acting for the bank had also begun or concluded more than 3,000 legal processes with customers in arrears that could lead to repossessions, Mr Boucher said.

Mr Brown of Ulster Bank said he did not expect all of the 4,000-plus legal processes against home owners to actually lead to evictions.

However, he said that around one in three Ulster Bank customers in long term arrears were refusing to engage with the lender.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News