BoI agrees €152,000 mortgage write-down with Dublin nurse

A BANK OF Ireland customer has secured a settlement on mortgage debt allowing her to repay the bank €18,000 – at a rate of €250 a month for six years – to settle an outstanding debt of €170,000.

Laura White, a 35-year-old nurse from Dublin, agreed a deal with the bank on Monday, settling a case taken over a shortfall arising from the sale of a house she voluntarily surrendered in 2009.

The settlement means she will not have to repay the remaining €152,000 but she will be prohibited from borrowing for six years and faces a €120,000 judgment if she fails to make the repayments.

This is one of the first settlements of mortgage debt to come to light in which one of the country’s main banks has written down mortgage debt to a level the borrower can afford to repay.

Bank of Ireland has said it doesn’t have a policy of debt forgiveness and deals with distressed borrowers on a case-by-case basis.

The bank’s subsidiary ICS Building Society, which lent Ms White €245,000 to buy the house in Coolock in 2005, took a legal action against her in late 2010. She handed the house back to the bank as she was struggling to meet repayments and wanted to leave Dublin and take a job in the west.

She thought the sale of the house would cover the debt. Her lawyers argued the property should have been sold more quickly, before the market fell further, though there was a dispute over when it was surrendered.

Ms White said she made mistakes like many others a few years ago by wanting to buy property but now she wanted to repay the bank what she could afford.

“I am just grateful I can pay something back and they have shown leniency. You can’t get blood out of a stone but it’s important to pay something reasonable and what you can,” she said.

Barrister Marie Mullarkey, who represented Ms White, said both sides wanted to agree a repayment amount she could afford to pay and was motivated to pay. “It is in everyone’s interest to take a realistic view of what can be repaid,” she said.

The settlement is similar to the new out-of-court personal insolvency arrangements proposed by Government whereby banks agree to write down debts to a level that a debtor can repay over six years.