THE CHIEF EXECUTIVE of AIB has said that one in five people in mortgage arrears can pay their mortgages but have ‘decided not to’.
Speaking after the bank announced a half-year loss of €572 milion, David Duffy said that there were people out there who were deciding to pay other debts rather than their mortgage.
“For the past few years, there has been no credible risk of losing your home.
So people default to paying the next thing where they are facing pressure.
Duffy said that the number of mortgages in arrears had been dropping, but the establishment of the Personal Insolvency Agency had prompted a number of people to stop paying their mortgages.
“People believed that if you went down the PIA route, you would get a better deal than from the banks, but then it became clear to them that to get into that, you had to be insolvent.”
Duffy added that there was no ‘rent-free option’ for mortgage holders and said that the bank would be sending out legal letters to home owners in arrears.
“It’s not discretionary to stay in your home and not pay your mortgage”.
AIB has agreed to restructure 4,000 mortgages, Duffy added.
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