Allied Irish Bank was the first mortgage lender to face scrutiny from Government officials when the bank’s chief executive, Mr. David Duffy, attended a recent meeting regarding AIB’s efforts to resolve the mortgage arrears crisis
The meeting between the Mr. Duffy and the Oireachtas Committee on Finance will be the first of several meetings where top banking officials from all the major lenders will have to discuss what they are doing for borrowers currently in arrears. In particular, the meetings aim to ensure that mortgage lenders are making genuine efforts to find viable solutions for those who are struggling to meet their repayments.
According to figures released by AIB, more than 4,400 homeowners have already agreed “permanent resolutions” with the bank. On top of this, a further 12,500 homeowners have been contacted to discuss potential solutions to resolving their outstanding mortgage debt. These agreed “permanent resolutions” were broken up as follows:
- 2,579 had their current loan arrangement recapitalized
- 1,677 had the term of their loans extended
- 182 had engaged in voluntary sales with the likely expectation of a debt write-down on the residual debt following the sale of their home
- Surprisingly, only 17 account holders have started a split mortgage arrangement with AIB. However, the bank says it has agreed 153 split mortgages with customers
During his speech, Mr. Duffy took the opportunity to say that there were a small proportion of people who simply won’t pay – even though they could afford to. He said that 2,000 accounts whose mortgages were in arrears had enough money in their deposit account to pay off what was owed.