Pepper Asset Servicing has announced details of how it plans to deal with 3,500 subprime mortgage customers in Ireland. The deal on offer may be indicative of future deals that banks may offer to mortgage holders who cannot pay their mortgages on time.
– Mortgages will be split into two parts, one live and one parked. The split will be based on the ability of the person to repay.
– Up to half the mortgage can be parked until a later date. The live part is paid under a restructured agreement.
– The mortgage agreement is reviewed every three years. Pepper will “subject 50% of any increased earnings to review”.
– If mortgage repayments under the new, agreed schedule are kept up, a 5% rebate is applied to the parked mortgage, i.e. 5% of the total paid in the year is deducted from the parked mortgage.
– If the mortgage holder can pay more than the agreed repayment amount, up to 20% of payments made in a year can be deducted from the parked mortgage.
– Interest will not be charged on the parked mortgage.