Brendan Burgess
Founder
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Very interesting comments from the Chief Executive of AIB to the Oireachtas Finance Committee
For anybody to be in the position where we are in a court repossession discussion or in the court process would require them to not have engaged or repaid us anything in a number of years.
If you are making regular payments and AIB takes a case against you, then you should quote this.
Brendan
Senator Aideen Hayden:
I was struck by Mr. O'Connor's comments on whether the mortgage arrears resolution targets had caused the bank to engage more forcefully with some borrowers than it might otherwise have done. I was also struck by his comment on the use of legal action to bring reluctant borrowers to the table. I want to ask Mr. Duffy a further question. There is a narrative that were it not for the courts, we would still have people swanning off on three holidays a year, not engaging with the process and so on. I personally think that is way overstated. Mr. Duffy appears to be agreeing that in some instances, legal actions seems to bring people to the table in a way that other activities on AIB's part have not. On AIB's relationship with the IMHO, overall, in terms of the number of court actions, AIB's numbers are reasonably low in comparison with some other lenders. Does Mr. Duffy think that having the IMHO as a body independent of the bank has been helpful for borrowers who may be fearful of engaging with a lending institution?
Mr. David Duffy: We had an Oireachtas discussion here where one of the Oireachtas Members brought up the point that there is a fear. That is why we introduced the IMHO, whereby the person can go, not to the bank, but indirectly to somebody else who would represent their interests. In answer to the Senator's question, I believe it has been very helpful to have that independent body which represents more of a consumer-friendly interest, and to then engage with us in trying to sort something out. That has been very successful.
The other issue that was raised was the tsunami of repossessions. That was misrepresented in the media today. For anybody to be in the position where we are in a court repossession discussion or in the court process would require them to not have engaged or repaid us anything in a number of years. In those cases, significant numbers will not end up in repossession territory at all because I think we have about 50% who re-engage.
Mr. Brendan O'Connor: There are some interesting re-engagement levels. We are actively seeking an adjournment in 50% of cases where there is a court date because we have had re-engagement. At certain stages in the process, we tend to get re-engagement and, certainly after we give the regulatory letters, we get re-engagement of about 50% at every stage. We actually have 800 people in the court process at the moment who are on a test period, so while they will appear in the legal numbers, they have re-engaged. They are on a test payment period and when that test payment period is over, we would expect them to come out of the legal process. We have brought 2,000 people back from more than two years in arrears who are no longer in arrears when, previously, they would have been in the legal process. It does drive an intensity of engagement and our observation is that it leads strongly to people coming back to the table.
For anybody to be in the position where we are in a court repossession discussion or in the court process would require them to not have engaged or repaid us anything in a number of years.
If you are making regular payments and AIB takes a case against you, then you should quote this.
Brendan
Senator Aideen Hayden:
I was struck by Mr. O'Connor's comments on whether the mortgage arrears resolution targets had caused the bank to engage more forcefully with some borrowers than it might otherwise have done. I was also struck by his comment on the use of legal action to bring reluctant borrowers to the table. I want to ask Mr. Duffy a further question. There is a narrative that were it not for the courts, we would still have people swanning off on three holidays a year, not engaging with the process and so on. I personally think that is way overstated. Mr. Duffy appears to be agreeing that in some instances, legal actions seems to bring people to the table in a way that other activities on AIB's part have not. On AIB's relationship with the IMHO, overall, in terms of the number of court actions, AIB's numbers are reasonably low in comparison with some other lenders. Does Mr. Duffy think that having the IMHO as a body independent of the bank has been helpful for borrowers who may be fearful of engaging with a lending institution?Mr. David Duffy: We had an Oireachtas discussion here where one of the Oireachtas Members brought up the point that there is a fear. That is why we introduced the IMHO, whereby the person can go, not to the bank, but indirectly to somebody else who would represent their interests. In answer to the Senator's question, I believe it has been very helpful to have that independent body which represents more of a consumer-friendly interest, and to then engage with us in trying to sort something out. That has been very successful.
The other issue that was raised was the tsunami of repossessions. That was misrepresented in the media today. For anybody to be in the position where we are in a court repossession discussion or in the court process would require them to not have engaged or repaid us anything in a number of years. In those cases, significant numbers will not end up in repossession territory at all because I think we have about 50% who re-engage.
Mr. Brendan O'Connor: There are some interesting re-engagement levels. We are actively seeking an adjournment in 50% of cases where there is a court date because we have had re-engagement. At certain stages in the process, we tend to get re-engagement and, certainly after we give the regulatory letters, we get re-engagement of about 50% at every stage. We actually have 800 people in the court process at the moment who are on a test period, so while they will appear in the legal numbers, they have re-engaged. They are on a test payment period and when that test payment period is over, we would expect them to come out of the legal process. We have brought 2,000 people back from more than two years in arrears who are no longer in arrears when, previously, they would have been in the legal process. It does drive an intensity of engagement and our observation is that it leads strongly to people coming back to the table.