An initiative set up by the Irish Mortgage Holders Organisation (IMHO) and AIB Group three months ago to help distressed mortgage holders through third-party representation has resulted in the agreement of 123 long-term sustainable solutions so far, the two parties said this morning.
The IMHO and AIB said that since the start of the initiative, 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. 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 have been fully agreed to-date, while others are at various stages of the resolution process.
“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 Hall.
Constantin Gurdgiev, director of IMHO, described the information from the 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,” he said.
“It also offers insights for Irish policymakers and regulators into how the process of engaging with distressed borrowers can be improved,” said Gurdgiev.
“The pilot programme with IMHO is meeting the expectations we had for this initiative when launched,” said Brendan O’Connor, head of the financial solutions group at AIB.
“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.”
The IMHO said the evidence from the initiative should be taken on board in a broader regulatory and legislative review of the mortgages crisis resolution process through the establishment of a model of trusted third party representation.
It also noted that 42pc of clients who have sought assistance required help in completing their standard financial statement. This, it said, shows an urgent need to establish a consumer-led working group to review the standard financial statement and to make it more consumer-friendly.
“The IMHO pilot experience shows, how people are deemed to be uncooperative needs urgent review,” said Hall. “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).”