herald

Thursday 16 August 2018

Confusion reigns as banks offer secret mortgage deals

CONFUSION reigned for troubled mortgage holders today as the Government continued to drag its feet over a solution.

Mortgage concerns increased after it emerged that certain householders are being offered secret deals to write off their mortgage and negative equity loans by their banks.

The facility available for some customers has been kept under wraps by financial institutions while thousands of homeowners face repossession of their property. The latest news about mortgage mayhem comes as the Government attempts to find a solution to the debt crisis.



surrender

Finance Minister Michael Noonan is to tell the Dail that we will have to wait three weeks for formal solutions to the debt problem. But banks have already stepped in to fill the void and are allowing some customers to be released from crippling mortgage debts.

And others in negative equity are being allowed to move homes. Major lenders including AIB, Bank of Ireland and Permanent TSB have already allowed "negative-equity mortgages" and this solution has the blessing of the Central Bank.

These deals are only offered on a strictly limited basis and to those who have enough knowledge to ask for them.

The write-off facility is only allowed when borrowers show that they can't afford to pay off the shortfall -- even if the bank were to let them pay it over a long period.

Borrowers also have to make a "voluntary surrender" where they hand back the keys and allow the bank to handle the sale of the property.

It's understood that the number of cases so far is limited.

Meanwhile, thousands of borrowers are struggling to make ends meet. As of June this year, Ireland has 777,000 residential mortgages worth €115bn. Of these, one in every 20 is in arrears of greater than six months. This figure has doubled in the space of just 18 months,

Comedian Brendan O'Carroll stepped in to provide €7,000 to a man whose life was threatened by a loan shark.

The caller to Joe Duffy's Liveline, Tom from Finglas, said that the lender told him he would be "found in a ditch" if he didn't pay back the €7,000 debt after borrowing at a massive 600pc.

Mrs Brown's Boys star Brendan said that he knew what it was like to face crippling debt.

"I was sick to the core when I heard this," he said. "I had to offer him help.

"I have been in the same position where you stare at the wall day in and day out. You sit and cry for days and days. All I want is for that man to have a good night's sleep tonight and be safe."



repossession

Separately, it's believed that the Government is considering using social housing machinery of the State to allow homeowners who face repossession to rent back their property.

People who face repossession may be able to rent their homes from the State after they have lost ownership.

clairemurphy@herald.ie

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