AIB MORTGAGE SNUB A ‘HOME LOAN DISASTER’

Lending ban for wage subsidy workers blasted

THE decision by the country’s biggest bank to ban mortgage loans to workers on Covid-19 payments was described as a “disaster” for those hoping to buy their own home.

It has emerged AIB has effectively ended lending to those receiving any State wage subsidies.

This means more than 400,000 workers whose wages are being supplemented – and over 465,000 people receiving the pandemic unemployment payment – have no hope of getting a mortgage.

The Labour party’s employment and social protection spokesman Ged Nash slammed the lender’s decision.

He said: “It is a disaster for anybody who was on the cusp of buying their own home.

“I fear this is harbinger of things to come because we are by no means out of the woods regarding the coronavirus and the economic challenge the pandemic has caused.

What’s going to happen over the next period of time is the wage subsidy scheme itself may be wound down but it could end up being replaced, as we have argued, with new temporary short time working schemes.

“They would support employers and help get people back to work and support incomes.

“The ambition that people who have been working and saving hard for the past few years for a deposit and who have now encountered what we hope will be a temporary blip on their work situation, this could end up ruining their dreams of owning their own home.”

The dramatic changes to AIB’S lending policy are contained in a leaked credit policy document obtained by the Irish Times.

The new measures will also apply to AIB’S specialist lenders EBS and Haven. The document states:

“Currently, the bank’s position on customers in receipt of any element of the Employer Temporary Wage Subsidy Scheme or the Pandemic Unemployment benefit is to pause these applications until such time as the impacted customer is no longer in receipt of the payment.”

Even workers not on payments might also be refused a mortgage as the documents advise bank managers to look at the sector they are employed in to check out how it is affected long-term.

Deputy Nash added: “This effectively bars close to a million workers from obtaining a mortgage from the country’s biggest bank which is 71% owned by the Irish State.

“The key point to remember is the State own a very substantial portion – a large majority – of the shares in AIB and this bank has a responsibility to the wider society.”

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The rally came amid plans by utility EDF to shut down the last ageing nuclear reactor of its Fessenheim plant near the German border overnight.