Permanent TSB has a plan to help landlords in debt - but no luck for homeowners
The bank has offered to write off money owed by some of its customers.
PERMANENT TSB is offering some of its mortgage customers who haven’t made progress on their loans a chance to get rid of their debt.
However, so far the offer has only been extended to landlords, and does not include residential customers. The offer by the bank, which is mostly owned by the state, will likely benefit many accidental landlords.
According to the Irish Independent, which first reported news of the deal this morning, financial experts believe other banks will begin to offer something similar in the near future.
In a statement to TheJournal.ie, Permanent TSB confirmed that it is writing to “certain buy-to-let mortgage customers” whose loans have been “non-performing for an extended period of time”.
Customers would have to agree to let the bank sell their properties in what’s called a voluntary surrender in order to secure the debt clearance.
‘Voluntary surrender’
The bank said that at present there were no plans to extend the offer to private householders or other mortgage holders who aren’t landlords.
“For customers who are offered and who agree to a voluntary surrender in this initiative, the bank has agreed to clear any arrears or shortfalls that remain on the loan after the property has been sold and that it will not seek any further repayment by the borrowers in respect of the relevant mortgage,” the bank said in a statement.
The offer isn’t being made to all landlords however – it’s made to a select few customers based on the bank’s “detailed review of the relevant loan accounts”, as well as a declaration of assets and other documents that must be submitted.
The offer is limited to customers that the bank decides genuinely cannot repay their loan and have no means of meeting the repayment terms of the loan or the shortfall debt which will arise upon the sale of the property.
A spokesman for Permanent TSB said that the move followed recent comments by the bank’s chief executive Jeremy Masding, who said the company would pursue a number of actions to deal with non-performing loans and that this initiative was part of that plan.
“While this current initiative is limited in scope, it is one of a number of initiatives which we are pursuing to reduce the number of non-performing loans at the bank. We believe it merits serious consideration by those customers who are invited to participate,” he said.
Permanent TSB, which is 75% owned by the Irish state after a bailout during the recession, has had a long-standing issue with a high number of non-performing loans as a result of the financial crisis.
Written by Gráinne Ní Aodha and posted on TheJournal.ie
