AIB to reveal write off plans to deal with mortgage debt book

Allied Irish Bank, one of the two major mortgage lenders, is in the final stages of formulating its strategy to offer debt write offs on some of its troubled loansmortgage-debt-write-off

AIB intends to reveal its plans on how it will approach debt write offs for mortgage customers struggling to keep on top of loan repayments. The bank is currently putting final touches on the measures that will be adopted in order to help those with distressed mortgages in a definitive manner. At present, around 10,000 of AIB’s mortgage holders find themselves trapped in a difficult situation where they are not able to pay for their mortgage at the end of the month, resulting in mounting – and unsustainable – arrears.

With an announcement due within several weeks, affected homeowners will wait with interest on the details of AIB’s plans to combat mortgage debt and, in particular, the circumstances in which it will consider a write off justifiable. According to sources discussed by the Business Post, write offs will be considered on a case-by-case basis. Approval for renegotiating loan debt will require mortgage holders to fully disclose their current financial situation.

In addition, borrowers must also reach agreed targets before a write off will be carried out. While borrowers work towards attaining these targets, the bank will put aside the debt which will then be written off when the targets being met. While the aim of mortgage debt write down should allow people to keep their homes, some may have to sell off their property as a condition.