Sara Routhier, Managing Editor of Features and Outreach, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming worl...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Apr 30, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

The Bank of Ireland forgave a nurse’s home loan that amounted to 152,000 euro, or the equivalent of $210,000, making this instance of debt forgiveness the highest profile case yet.

Laura White first purchased her home, located in North Dublin, for 245,000 euro. But after falling behind on her payments, the Bank of Ireland agreed to help her by offering complete home loan forgiveness in return for surrendering the home and repaying 18,000 euro over six years.

“This is a great mercy that the banks have showed,” said White, as reported by Bloomberg. “There is great hope for people here.”

Experts believe this move, similar to a bank-sponsored short sale, is something the Bank of Ireland decided to perform amid the country’s housing crisis. With one in seven home loans being upside-down, Ireland’s housing market is in a position similar to the United State’s market.

“Banks probably still have to absorb large losses,” said Michael Saunders, economist at Citigroup Inc. in London to Bloomberg in a note. “The housing market and economy remain weak.”

Ireland’s government sought a bailout in 2010, but the soured housing market continues to remain on a downward trajectory.

Due to the country’s continuing economic failure, Ireland’s central bank is advising other banks to find solutions to the nation’s growing home loan problem.

“We have to set a specific timeline for delivery which requires lenders to segment their mortgage arrears portfolios and to pilot appropriate solutions by the end of September this year, with the full roll out to commence in the last quarter of the year,” said Bernard Sheridan, director of consumer protection at the central bank.

The Bank of Ireland said that deals such as White’s will be considered on a case-by-case basis, but some experts remain hopeful that the bank will continue to help the Ireland’s struggling home loan borrowers.

“Deals like this are going to become commonplace,” said Ross Maguire, the lawyer who represented White, reported Bloomberg. “There are going to be based not on the level of writedown the bank is forced to take, but rather on the ability of the borrower to pay and get on with their lives.”