Key Post AIB/EBS customers should use the Irish Mortgage Holders Organisation for advice

Brendan Burgess

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AIB is now paying the Irish Mortgage Holders Organisation to advise AIB customers. I have reported on this deal in this post

But the bottom line for AIB customers in difficulty is that they can now get free, independent advice.
http://www.askaboutmoney.com/forumdisplay.php?f=109
All advice will be supplied on a fully independent basis by the IMHO and a dedicated group of advisers from the IMHO will operate the initiative for AIB Group customers. The IMHO will then submit the relevant information to a designated team in the AIB Group arrears support unit for consideration and agreement of next steps

While AIB has said that IMHO customers will be treated the same as people who go direct or through other advisors, the fact that IMHO have a designated team in the AIB Arrears Support Unit means that in practice, they will probably get favourable treatment. Even if it only means that you will get a quicker response to your case, it would be worth doing.

As IMHO will be building up particular expertise with AIB, they will know what is possible and what is not possible.

If you don't like the advice you get from IMHO, you can go directly to AIB.
 
In my experience, people are already so confused with all the initiatives that have been put forward by the central bank, the Insolvency Service of Ireland, the Individual banks, the IMHO, MABS and also by Independent Debt Advisors and PIPs, not to mention bankruptcy Solicitors, so much so that most of them are utterly confused as to what is the best way forward.

Every couple of weeks something new emerges and really it doesn't seem to be helping.There needs to be some sort of unified approach to help people sort out their debt problems. I think the Insolvency Service of Ireland is proving to be a very weak link in this chain. I would have expected them to be a lot more pro-active in developing EFFECTIVE policy and procedures. The reality is that they have created a bureaucratic monster that is not fit for purpose. It seems that they are mainly interested in regulation.
 
Jill Kerby was on Seán O'Rourke yesterday and her comments were repeated on The Late Debate, where I heard her make the following points. (She may have made other points, I didn't hear the SO'R interview)

I am not so keen on this...
It's not often I disagree with Jill. It's not often I agree with David Hall. He has savaged me personally on air on many occasions. He has often ranted and raved. But this is a great iniative and Jill has missed the point completely. She is wrong on all 5 reasons.

1 The IMHO is not regulated or surpervised. AIB should not deal with an unauthorised and unlicensed charity. They should deal with someone who is authorised and experienced.
The regulation of debt advice is meaningless. Fill in the complicated paperwork, pay for PI insurance, pass the QFA exams and you are fine.

I am not regulated, but I think my advice is usually good. MABS is not regulated and their advice is usually good.

2. There has always been an imbalance of power between the borrower and the lender. No one should take advice unless it it independent, impartial, fee based and experienced.
The IMHO is independent and impartial. People in mortgage arrears who are not engaging can not afford to pay someone €200 an hour for advice. None of the advice given on askaboutmoney is fee-based. Should people just avoid Askaboutmoney because we don't charge? Fee based advisors are important in some areas - investment, tax, pensions etc. But they are probably not relevant in cases of arrears on the family home. They might be relevant in cases of big commercial debt.

3 As far as I am concerned, AIB's fee is a commission and people should not deal with people who take a commission from the manufacturer of the product
If I had thought of the idea of approaching AIB to pay me to set up an organisation to advise people in financial difficulty, would people accuse me of not being independent and impartial? They probably would but they would be wrong. They would ignore completely the campaigns I have run on behalf of consumers over the years.

When I heard this, I had a slight "professional jealousy" of David Hall. He came up with a good idea and managed to persuade AIB to pay him to implement it. I have come up with lots of good ideas and have never managed to persuaded the lenders to implement them or change their policies in any way. Fair play to David Hall.

If I was approached to set up a similar organisation for the customers of, say KBC, I would charge KBC a fat fee for my time and expertise, and I would not apologise to anyone for it. Nor would it compromise me in the least.

I am surprised that David Hall is doing this for free.

4. AIB are giving IMHO €150k. They should make this, and more, available to customers for fee based advisors. The borrower could bring the advisor with them to the next meeting and discuss the options. Such an advisor would charge €200 an hour, so for two hours that would be €400 so €150,000 would pay for 375 cases. David Hall expects to deal with hundreds of cases a month.
Jill simply does not understand how debt advice works. I give most of my advice through askaboutmoney. On a very few occasions, I have helped people directly. It takes a lot more than 2 hours. It's not a meeting. It's an ongoing process which requires information gathering, meeting the client, putting a proposal together, chasing the lender, negotiating, assessing the offer, assessing the alternatives.

My concern about IMHO's initiative is that they expect to process around 300-400 cases a month for €25k. This can't be done. They will need more money if this happens.

At the press conference, I asked AIB would it not have been a better idea to give the money to MABS who have the debt advisors in place in 60 locations around the country. They said that they would work with anyone who would encourage the borrowers to engage with them.

5. Bankruptcy is often a solution and David Hall doesn't believe in bankruptcy.
David Hall has been very clear that bankruptcy is often a solution. He has made the argument, which Ross Maguire also makes, that when someone goes bankrupt, their unsecured debts and negative equity will be wiped out, and so may actually be in a better position to meet mortgage payments on a much reduced mortgage amount. I am not sure that this will happen in practice, but it's an interesting idea.
 
I think that there is a risk that this iniative will fail and that there will be a massive falling out between AIB and David Hall.

He will find it very difficult to recruit 5 good debt advisors for the money he is paying. (If they are good, they can get €200 an hour from their own clients)

I suspect that many of the people who are not engaging, simply don't want to engage.

5 people will not be able to process 300 cases a month.

AIB, despite their best intentions, will probably not be able to process 300 cases a month and keep up with all their other work.

But it's well worth a try and if it does not work, lessons can be learned , and a better version can be devised.
 
Whether intentional or not AIB has overnight become the darling of the media from being much maligned and heavily criticed. Money would not buy such a transformation.
 
My concern about IMHO's initiative is that they expect to process around 300-400 cases a month for €25k. This can't be done. They will need more money if this happens.

I hadn't realised that IMHO's average charge per client at present is €800!

David Hall ‏@davidhall75

@karldeeter range from €400 up to average €800, again for those who can afford , these subsidise operation for those who can't afford
Even if we take the lower figure of €400 used here, 300 AIB cases would cost €120,000 a month!

If I was asked to set up a facility by a lender, I would charge on a per case basis and I think that around €800 would be appropriate for the full service including advising on the offer.
 
I know this post is a few weeks old but I just wanted to ask as I noticed on the IMHO website they say:

"Your information will remain secure and confidential".

Just how secure and confidential is the information supplied to them from a mortgage holder? Are they just acting as a "middle man"? Surely they have to give/get information to/from the AIB/EBS/Haven in order to help distressed mortgage holders, or am I getting this all wrong?
 
I presume that they will discuss your information with AIB.

By confidential, they mean that they won't go talking in public about it.

Brendan
 
Apologies for bringing up an old thread but wondered had anybody availed of the services of the IMHO yet and if so, what have your experiences with them been like?
 
I asked for some info about the IMHO some weeks ago as I have a meeting with them and A.I B in a couple of weeks but for some strange reason everyone is tight-lipped. there may be confidentiality clauses !!!!!
 
They have released a report on the first three months


Mortgage Holders initiative by IMHO and AIB Group has proved to be a success

·123 long term sustainable solutions agreed

The ground-breaking initiative between the Irish Mortgage Holders Organisation (IMHO) and AIB Group designed to help distressed mortgage holders has resulted in:


  • · 1011 mortgage holders received information and activation packs containing an introductory letter explaining the core procedures for dealing with arrears, a plan of action for the borrower, a standard financial statement (SFS), a mortgage resolution guide, a link to an online video on how to complete a financial statement, an authorisation letter for IMHO to act on the borrower’s behalf, a pre-paid self-addressed envelope for return communications, and a check list
  • · Of these, 441 packs have been received back from the borrowers. We are following up with a number of these that are incomplete.
  • · Follow ups on SFS and related documentation resulted in 263 proposals being sent to the bank to-date. The remainder are being assessed by IMHO
  • · Of these proposals, 123 long-term sustainable solutions have been fully agreed to-date, while others are at various stages of the resolution process
  • · Additionally, 12 customers who had already been offered a mortgage solution by AIB prior to the AIB/IMHO initiative, approached IMHO for advice on the offers. Following a review these long term sustainable offers were accepted by the customer.
“Given that the pilot scheme has been in operation for just 55 working days since the launch, this is a very significant result and confirms our contention that this free and independent service would be successful,” said David Hall, Director of IMHO. “We are very pleased that the scheme has worked so well and believe that this scheme is a template for a trusted third party to act on borrowers behalf to engage with banks to achieve long-term sustainable solutions for their mortgage challenges.”

“AIB Group has acted in good faith and worked assiduously with us to reach those sustainable solutions that are so necessary,” said Mr. Hall.

According to Constantin Gurdgiev, Director of IMHO, “The latest data from the IMHO-AIB pilot programme is the first, independently verifiable data on the importance and the efficacy of independent professional supports to the distressed borrowers in Ireland. This data confirms that the pilot scheme offers significant help to distressed borrowers, increases their engagement with the lenders and delivers meaningful impact in terms of arrears resolution deals achieved. It also offers insights for Irish policymakers and regulators into how the process of engaging with distressed borrowers can be improved”.

Head of the Financial Solutions Group at AIB, Brendan O’Connor said: “The pilot programme with IMHO is meeting the expectations we had for this initiative when launched. The interaction with IMHO and their staff has proved to be professional and constructive with a focus on achieving sustainable and practical resolutions for those AIB Group customers who have chosen IMHO to act in an advisory capacity for them in their negotiations with the bank. This initiative is another way for customers to engage with the bank and the pilot has demonstrated the value for some consumers of having access to a trusted advisor who can provide them with practical and objective advice in their pursuit of a resolution to their mortgage difficulties.”

Lessons learned from the process according to the IMHO include:

  • · The evidence from this initiative should be taken on board in a broader regulatory and legislative review of the mortgages crisis resolution process, where a model of trusted third party representatives be established.
  • · 42% of clients who have sought assistance from the IMHO required help in completing their standard financial statement. This shows an urgent need to establish a consumer-led working group to review the standard financial statement and to make it more consumer-friendly. In addition, new channels for assisting mortgage holders in completing their SFS are needed. For example, MABS could be used more actively in this task to feed through completed SFS to independent and professionally staffed organisations, such as the IMHO for structuring proposals and negotiating with the banks.
The IMHO pilot experience shows, how people are deemed to be uncooperative needs urgent review. Many borrowers are currently being categorised as uncooperative, just as the risk of action by the banks against distressed home borrowers is increasing as the banks set about meeting Mortgage Arrears Resolution Targets (MARTs) ,” said Mr Hall.
ENDS
For further information contact:
David Hall Constantin Gurdgiev Niamh Hennessy Michael Keane
Director Director AIB Press Office Insight Consultants
 
I spoke to David Hall and the most significant achievement is that they have agreed with the lenders that 26 mortgages were unsustainable. Before the borrower agreed to surrender their home, AIB offered a deal on the shortfall.


The deal involved a maximum period of 7 years and a maximum payment of €900 per month.

Mark Paul reports in the Irish Times

“About 26 of the deals involved the property being sold or surrendered. About half of those involved got the remaining debt completely written off. The rest involved monthly payments on the residual debt, following sale, for up to seven years,” David Hall said

I have long argued that the lenders need to encourage the borrowers with unsustainable mortgages to recognise the inevitable and that they can do this by writing off the shortfall. In my experience, the banks have simply refused to do any deal until after the property was sold.

I am delighted that AIB has seen how important it is to reach agreement on the treatment of the shortfall before the borrower surrenders.

It looks as if AIB has recognized in at least some cases, that everyone is better off if the property is surrendered and the shortfall is written off.
 
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