AIB write off 150k. IMHO helped.

[daftpunk]

AIB is reported to have written 150k off of a 400k mortgage in Dublin.
IMHO involved.
]AIB writes off €150K in mortgage debt for family
Reports are emerging of a deal between AIB and a family which will see more than a third of their mortgage debt written off, while they stay in their home.

According to the Irish Independent €150,000 was written off under the terms of the agreement which is thought to be the biggest of its kind so far in Ireland.

The Irish Mortgage Holders Organisation was involved in the process.
http://www.independent.ie/business/...-after-150k-debt-is-written-off-30084311.html

 

[Delboy]

Sad state of affairs but not surprising in this country. And to really rub the taxpayers nose in it, the bank does'nt appear to have taken an equity stake in the house to allow them to recoup the losses in the future as prices eventually recover or even if the family in question come into money.

 

[Bronte]

Sad state of affairs but not surprising in this country. And to really rub the taxpayers nose in it, the bank does'nt appear to have taken an equity stake in the house to allow them to recoup the losses in the future as prices eventually recover or even if the family in question come into money.

Why is this a sad state of affairs? A family in total financial meltdown have been given a solution and they get to stay in their home. Your solution is what, the family should just give up, as that's what they would do if they were forced to hand over the house once the mortgage was paid off.

 

[Delboy]

Why is this a sad state of affairs? A family in total financial meltdown have been given a solution and they get to stay in their home. Your solution is what, the family should just give up, as that's what they would do if they were forced to hand over the house once the mortgage was paid off.

Where did it say anything about total financial meltdown in the Indo? They both have jobs, 1 in a job for life. And why would handing over the house = 'family should just give up'. A bit dramatic there Bronte.

My solution would be for the house to be handed over, a debt arrangement agreed that they could afford for a couple of years and after say 3 or 5 years, their remaining debts are written off.
But debt responsibility seems to be a dirty term in this country now, only to be adhered to by fools

 

[daftpunk]

It says they have other loans, debts etc. Are they still outstanding I wonder?
It makes you wonder why people will pay PIPs if the IMHO will do this job for free.

 

[Bronte]

Where did it say anything about total financial meltdown in the Indo? They both have jobs, 1 in a job for life. And why would handing over the house = 'family should just give up'. A bit dramatic there Bronte.

My solution would be for the house to be handed over, a debt arrangement agreed that they could afford for a couple of years and after say 3 or 5 years, their remaining debts are written off.
But debt responsibility seems to be a dirty term in this country now, only to be adhered to by fools

Of course it's a financial meltdown, you don't get 150K written off just like that, they couldn't afford the current mortgage, they can now afford most of the new mortgage, with part of it parked, they are able to service their other debts, who is losing what here?

Let's take your scenario, bank would probably lose more on the deal, because of the NE, then the family would also not be able most of the remainaing debt, BECAUSE, they would now be renting. In addition I imagine the other debts would go unpaid. Then the taxpayers would be at a further loss. You seem hell bent on them being punished by losing their home, what does that achive? In other words you'd prefer they went bankrupt/insolvent.

The only reason the bank agreed to this is that the figures stack up by writing off the 150K and parking part of the mortgage, bank saves on a lot in this scenario, time and money, stress of evicting a 'family' publicity etc.

In any case people are going to have to realise that if the banks start putting everybody out of their homes we will cause more untold stress in society. Haven't people had enough.

 

[Bronte]

It makes you wonder why people will pay PIPs if the IMHO will do this job for free.

Nobody is doing anything for free. IMHO may be free to the family, but someone, I imagine AIB are paying IMHO.

As for the Pip's and the insolvency service, total joke so far. Another not fit for purpose quango and system.

 

[daftpunk]

Nobody is doing anything for free. IMHO may be free to the family, but someone, I imagine AIB are paying IMHO.

As for the Pip's and the insolvency service, total joke so far. Another not fit for purpose quango and system.

Seriously, you think AIB are paying the IMHO to help write down debt?
That is a crazy situation if true. I know they initially gave a sum to help fund an office for the IMHO, but if they are now paying them to help families receive write downs it is all gone crazy. PIPs are getting 5-7k approx for each PIA, so families receiving this for free is definitely good news.

 

[Brendan Burgess]

Let's take your scenario, bank would probably lose more on the deal, because of the NE,

I think that this is the Key Point. AIB will lose less on this deal that they would on repossessing the property. We are not given the current value of the property, but we are told the value of the property.

The deal was

Main mortgage|€200k
Warehoused forever|€40k
Written off|€150k
Total|€390k

If the property was bought at the peak, it could be worth around €160k.

If the bank repossessed, they would get around €150k after costs. They might try to get some long-term payment from the couple, but after they pay rent and living expenses, there probably wouldn't be anything available.

So the bank gets more from this deal that they would get through repossession.

Delboy said

the bank does'nt appear to have taken an equity stake in the house to allow them to recoup the losses in the future as prices eventually recover or even if the family in question come into money.

A fair point.

If the borrower can make full repayments on €200k, why not simply warehouse the full €200k instead of writing off most of it?

That way, if house prices increase, the taxpayer would benefit from any increase. Under the agreement, the borrower will get the benefit of any increase.

Let's say AIB offered this to the customer. I would probably advise the customer to go bankrupt and get a fresh start in five years. We are back to Square 1 for AIB, they would get the current value less the costs of repossession.

What has this family's history of engagement been like?
This is also a key issue. If the family has been struggling for 5 years and fully engaging with the lender, then they have probably taken enough pain and deserve to get a deal.

 

[1dave123]

Hi - does anyone know if, in these type of arrangements, there are any tax implications for the recipient ? ... specifically a gift tax liability relating to the value of the loan being written off ...... or would the Revenue view this as an arms length commercial arrangement and so ignore? Ta.

 

[Brendan Burgess]

Hi - does anyone know if, in these type of arrangements, there are any tax implications for the recipient ? ... specifically a gift tax liability relating to the value of the loan being written off ...... or would the Revenue view this as an arms length commercial arrangement and so ignore? Ta.

Please don't take this off topic. Either start a new thread or read one of the previous threads on the topic.

 

[Delboy]

What has this family's history of engagement been like?
This is also a key issue. If the family has been struggling for 5 years and fully engaging with the lender, then they have probably taken enough pain and deserve to get a deal.

We don't know whether they have been engaging or not. We don't know whether they drive 2 cars (high spec, new or old and clapped out) instead of 1. We don't know what sort of lifestyle they lead...holidays, eating out etc. It's all cloak and dagger stuff.

Whereas their neighbours in a similar enough situation, could be earning slightly more but living far more frugally. But they'll get nothing.

There should have been at least a stake kept in the house by the bank. At a minimum

 

[Brendan Burgess]

Hi Delboy

We don't know. But I spoke to AIB at the time of the launch of their revised split mortgage product and they made it very clear that they would only be giving them to people who had shown that they had engaged with the bank for some time.

You are right. There is a moral hazard issue here. As there is in treating smokers in hospital and as there is in paying Jobseekers Allowance to people who don't bother to look for work. We often reward the wrong sort of behviour.

 

[Sunny]

We don't know whether they have been engaging or not. We don't know whether they drive 2 cars (high spec, new or old and clapped out) instead of 1. We don't know what sort of lifestyle they lead...holidays, eating out etc. It's all cloak and dagger stuff.

Whereas their neighbours in a similar enough situation, could be earning slightly more but living far more frugally. But they'll get nothing.

There should have been at least a stake kept in the house by the bank. At a minimum

What's it got to do with you? Would you prefer they went on RTE and detailed their financial situation and we could then have a public vote as to whether they should get a deal or not?

People are commenting on a media story with very little detail. The bank have obviously decided that this deal maximises the recovery value on the loan. Do you want every deal that AIB makes to be given to you so can approve first? Stories like this should not be reported. Then there wouldn't be any moral hazard.

 

[Delboy]

What's it got to do with you? Would you prefer they went on RTE and detailed their financial situation and we could then have a public vote as to whether they should get a deal or not?

People are commenting on a media story with very little detail. The bank have obviously decided that this deal maximises the recovery value on the loan. Do you want every deal that AIB makes to be given to you so can approve first? Stories like this should not be reported. Then there wouldn't be any moral hazzard.

Your right, it's got nothing to do with me. I don't pay taxes, the state does'nt own AIB.
I'm not in negative equity and not paying a large mortgage on a house I've now outgrown. Absolutely nothing to do with me.

Stories like this are leaked. I did'nt put it in the papers. And leaked for a reason I'm sure

I look forward to seeing all the posts on here in years to come when Dail committee's and tribunals are investigating the generous debt write off's of the politically connected/related etc. Because this is Ireland and that will happen

 

[Brendan Burgess]

Hi Sunny

It's very important to report these types of deals as they allow others to know what to expect. AIB says that they write down debt in certain cases, but if we don't know anything about those cases, people don't know what to do.

I would have advised this couple that their mortgage was unsustainable and that they should surrender the house and try to do a deal on the shortfall. Now it looks as if that advice may have been wrong. They might get to keep the house and get a write down.

AIB won't publish their criteria in case people engineer their situation to meet the criteria.

 

[Sunny]

Hi Sunny

It's very important to report these types of deals as they allow others to know what to expect. AIB says that they write down debt in certain cases, but if we don't know anything about those cases, people don't know what to do.

I would have advised this couple that their mortgage was unsustainable and that they should surrender the house and try to do a deal on the shortfall. Now it looks as if that advice may have been wrong. They might get to keep the house and get a write down.

AIB won't publish their criteria in case people engineer their situation to meet the criteria.

That advice mightn't be wrong next time though Brendan. The banks have always said it is on a case by case basis. Leaking this to the media makes it sound like this is now standard operating practice for AIB. It's not. We don't know the specifics of this case and we never will. Therefore what was gained by running the story? All it has done is probably given people false hope that all they have to do is ask for a write off and then come on this site moaning when they don't get it.

 

[daftpunk]

These people could have serious medical difficulties or something on par, and AIB could be generous with this deal. Nobody knows yet, and we may never know. Personally I think it is great for them.
Of course some will argue that by struggling and not missing any repayments, the bank will not write down debt for you. Yet people who default, purposely or not, will see write downs quicker. Bit of an unfortunate situation as the scammers who cheat will benefit alongside the those most in need.
Suppose it's just the way things go.....in Ireland.

 

[Delboy]

That advice mightn't be wrong next time though Brendan. The banks have always said it is on a case by case basis. Leaking this to the media makes it sound like this is now standard operating practice for AIB. It's not. We don't know the specifics of this case and we never will. Therefore what was gained by running the story? All it has done is probably given people false hope that all they have to do is ask for a write off and then come on this site moaning when they don't get it.

Do you think it was AIB that leaked it?
David Hall was out very quick on all the radio stations this AM....bit of a turf war going on with IMHO and New Beginnings. Talk of running in future elections.

 

[Bronte]

I look forward to seeing all the posts on here in years to come when Dail committee's and tribunals are investigating the generous debt write off's of the politically connected/related etc. Because this is Ireland and that will happen

Yes that will happen, and has happened. Haughey and Garrett. AIB and BofI if I remember correctly.

But this case is only an ordinary family, one of many. If the figures mean that more is repaid than otherwise is it not a good idea?