Dublin Nurse Gets €152,000 Written Off Mortgage

A Dublin woman has secured a write-down in her mortgage debt of €152,000 from Bank of Ireland in one of the first recorded cases of debt forgiveness from Ireland's major banks.

In a case that will be studied closely by the more than 10,000 homeowners who are expected to follow her lead and surrender their homes because their mortgage is so far in arrears, nurse Laura White has agreed to pay back just €18,000 over the next six years.

Bank of Ireland has agreed to write off the remainder of her debt.

New Beginnings - a group of legal experts established in response to Ireland's growing mortgage crisis - helped her to secure the deal and said it hoped that it can get similar results for hundreds of clients over the coming months.

Ms White took out a mortgage for €245,000 from ICS, a subsidiary of Bank of Ireland to buy an apartment in the Coolock area of north Dublin in 2005.

She was working as a prison nurse at the time, but four years later in 2009 she was got into financial trouble, and went into arrears.

Bank of Ireland took legal action against her in 2010, and she handed the keys to the house back to the bank.

Eventually, the bank sold the house, but there was still €170,000 owed on the balance.

Now, under the deal, the bank has agreed to accept €250 a month for the next six years.

"I have never been on the dole, I have always paid my taxes and other loans. I am aware that I entered into a commitment when I took out my mortgage," Ms White said.

"I really wanted to pay my debts. I am delighted the bank has shown mercy but there are downsides."

She can no longer get a loan until the six year debt is paid off, and she has been forced to move to Kildare to more affordable accommodation.

She also can't replace her car in that time.

"I will be effectively bankrupt for the next six years. I now live in digs and can't afford to live in Dublin. I can't get a loan or an overdraft," she said.

Experts say the deal could "put the fear of God" in banks that a this could lead to a trend of people abandoning their homes.

But David Hall of New Beginning said the case showed that it made sense for banks to strike a deal with struggling homeowners rather than pursue them through the courts.

"Why spend more money pursuing people in the courts on a case-by-case basis when deals could be struck much more efficiently using other methods. The legal fees alone in this case could end up costing more than the write-down," he said.

But Bank of Ireland moved quickly to dampen expectations that other deals like this one are in the pipeline.

"Mortgage debt forgiveness is not a solution policy employed by Bank of Ireland," a spokesman said.

"The outcome of this case is not as a result of forbearance applied by the bank but instead reflects the conclusion of an exhaustive debt recovery, repossession and court process."

The government is expected to publish new personal insolvency legislation in the coming months.