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€150k written off mortgage in debt deal

A Dublin family in financial distress is to have €150,000 written off their mortgage in a deal to help them stay in their home.

State-rescued AIB has agreed to write off more than one-third of the home loan debt in what is believed to be the biggest residential mortgage write-off to date.

The deal came about through the link-up between the bank and the Irish Mortgage Holders Organisation.

The deal is believed to be the first where a family was allowed to stay in their home.

It is understood the husband works in the private sector and the wife is a public servant, but the couple have seen their income collapse due to pay cuts, hikes in income taxes and levies.

The couple are based in the greater Dublin area and have two children.

They owe €400,000 after borrowing to buy their home during the boom, a figure which includes €30,000 of arrears.

The family don't have any buy-to-let or holiday home mortgages, but are struggling with loans, credit card debt and other borrowings while their home is in massive negative equity.

FORGIVENESS

Revelations about the huge debt forgiveness deal are expected to give hope to others who are unable to meet their repayments and fear that their family will be forced to give up their home.

Some 96,000 residential mortgage accounts are three months or more in arrears.

The deal is just one of 250 completed by AIB and the Irish Mortgage Holders Organisation (IMHO), which act as an independent third party to negotiate between a number of banks and their distressed mortgage holders.

Under the new arrangement, AIB has agreed to allow the family to split its mortgage, with full capital and interest repayments to be made on €200,000.

Another €40,000 will be split off and no repayments will be made on this and no interest will accrue.

When their circumstances improve, they will resume making payments on the €40,000 debt.

A further €153,000 will be written off, it is understood.

HNEWS@HERALD.IE


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