AIB writes off home debt for two more mortgage holders

A further two distressed mortgage holders have been given debt write-offs of more than €140,000 each by Allied Irish Banks in recent weeks, The Irish Times has learned.

The bank has also offered 86 split mortgages to customers in long-term arrears, with many of these arrangements also involving substantial levels of debt forgiveness.

No precedent
All the deals were brokered by the Irish Mortgage Holders' Organisation (IMHO) but its director, David Hall, last night warned borrowers in similar distress that AIB's decision to write off almost half the value of three separate mortgages while allowing the couples retain ownership of their homes did not set a precedent.

The news of the two new deals worth between €140,000 and €150,000 comes just 24 hours after details emerged of another arrangement reached between AIB and a couple from Dublin with an outstanding debt of €400,000 on a home now valued at just €150,000.

Under that deal, AIB wrote off €150,000 and allowed the couple, who have two children, to split the outstanding mortgage in two, with €40,000 of it parked and the couple agreeing to pay interest and capital on the remaining portion of the loan.

Mr Hall said that the two new cases were in line with the first one.

One of the couples lived alone in a property with a mortgage of just under €400,000, while the second home was owned by a couple with children and their mortgage was slightly larger.

While he welcomed the deals being done, he was was careful to caution others in mortgage arrears against getting their hopes up that they would qualify for a like-for-like arrangement.

Case-by-case basis
"I know people hate hearing it but everything is being dealt with on a case-by-case basis," he said, stressing that all the deals being done were based on people's ability to service the restructured loans.

Since the middle of November the IMHO has also reached long-term agreement with AIB for dozens of other customers with 86 split mortgages put in place.

The nature of these arrangements differ, with some borrowers having a portion of their mortgage warehoused without being offered any debt write- down and others given substantial amounts of debt forgiveness.