AIB has made its lending criteria much stricter

[Brendan Burgess]

according to today's Irish Times

AIB introduces ‘frightening’ mortgage rules and halts lending to Covid payment recipients

Documents reveal de-facto ban on lending to those in receipt of State wage subsidies

www.irishtimes.com

All applications from people in receipt of Covid payments to be paused until they are no longer in receipt of it
With joint borrowers, the person in receipt of a Covid payment is to be discounted completely
Underwriters are told to look at the sustainability of the sector in which the person is employed
Bonuses are to be excluded

No exceptions to the Central Bank rules for second time buyers
No exceptions for loans over €500k (But not many FTBs would be borrowing over €500k)
But exceptions already granted in an Approval in Principle to be honoured.

All Negative Equity trade up or trade down mortgages are closed - even if they have approval in principle already.

Brendan

 

[cremeegg]

The bank said it is “imperative the mistakes of the past are not repeated”

So they are planning a whole new set of mistakes.

It is quiet unbelievable that at a time when Government is making every effort to keep liquidity in the economy and the ECB has fully converted to supporting business activity that AIB has taken this attitude.

The Government should tell them that if there isn't an immediate about face they will face action. The Govt cannot allow its economic policy to be undermined like this.

 

[Sarenco]

Are you suggesting the new Government should put pressure on AIB to make riskier home loans?

I can't see anything surprising in those revised guidelines. They look like a perfectly rational response to radically changed circumstances.

 

[FCBC12]

Will this affect people who have completed the 'Loan Acceptance' stage with the bank, and are just waiting on the house to finish (in 2 weeks) before drawing down the mortgage?

 

[JamesN]

They seem reasonable but obviously it will kill hope for a lot of people and affect many people who could ordinarily sustain a mortgage. That's difficult for people to go through.

 

[Brendan Burgess]

That's difficult for people to go through.

It's also difficult for people to be stuck in arrears and negative equity

 

[JamesN]

It's also difficult for people to be stuck in arrears and negative equity

It's not particularly difficult in this country because there seem to be very little repercussions.

 

[Gordon Gekko]

At a human level, this is very tough on people.

But it seems a very rational and reasonable response from a bank.

The borrowers’ incomes and jobs are under pressure for God’s sake.

 

[JamesN]

That was my point, having been there before - its tough on a human level.

It doesn't take away from the banks response, particularly in an environment where once the mortgage is taken down that there is not a whole lot of room for comeback from that bank. We all have heard stories of people sitting in houses for years with no repayments being made. We need a freer market where its easier to get a mortgage, but freer to default and straightforward for a bank to claim the property back without pitchforks being branded.

 

[NoRegretsCoyote]

But it just goes to show that short-sightedness that has always plagued the Irish banks.

When the sun shines they throw away their umbrella. When it rains they throw away the suncream.

 

[Hubert]

It's also difficult for people to be stuck in arrears and negative equity

Hi Brendan - have been asked to help out a relative on this but before we get into it, is it a waste of time in the current environment trying to do something outside the norm with a mortgage application?

according to today's Irish Times

AIB introduces ‘frightening’ mortgage rules and halts lending to Covid payment recipients

Documents reveal de-facto ban on lending to those in receipt of State wage subsidies

www.irishtimes.com

All applications from people in receipt of Covid payments to be paused until they are no longer in receipt of it
With joint borrowers, the person in receipt of a Covid payment is to be discounted completely
Underwriters are told to look at the sustainability of the sector in which the person is employed
Bonuses are to be excluded

No exceptions to the Central Bank rules for second time buyers
No exceptions for loans over €500k (But not many FTBs would be borrowing over €500k)
But exceptions already granted in an Approval in Principle to be honoured.

All Negative Equity trade up or trade down mortgages are closed - even if they have approval in principle already.

Brendan

Hi Brendan have been asked by a family member to help them try and get a large mortgage. They have a 15% deposit and some farm land as security. I would have thought now is a bad time to be looking for finance from a bank and also probably a bad time to be buying an expensive house (over 600k). would be good to hear your view. Tsk

 

[DublinHead54]

By doing this are they not admitting that they don't have the ability internally to assess and determine credit risk appropriately for lending?