Finance Ireland announced today that is to take its Lifetime Mortgage products off the Irish market due to the ongoing difficulties in the wholesale banking and mortgage securitisation markets.
The company says that demand for the Lifetime Mortgage products remains very strong, however, due to the unavailability of reasonably priced wholesale funding, the company has temporarily withdrawn its Lifetime Mortgage products. Finance Ireland said it continues to manage its existing mortgage and reversionary asset portfolios and will honour all existing loan offers in issue.
The company is seeking to re-commence the writing of new business for its Lifetime Mortgage products once the wholesale banking market stabilises. The company will announce its audited full year results for the year ended 31 December 2007 in early April 2008, and a further update will be provided in that announcement.
People over 60 years-of-age, who own their own home were able to release some of the considerable equity built up in their property.
The amount available depended on the entry age of the applicant and the market value of their property – ranging from €25000 up to a maximum limit of 40% of the value – Typical APR 6.35%.
There were no repayments over the life of the mortgage, which is repaid on the eventual death of the homeowner/s or the sale of the property.
The homeowner/s hade the legal right to occupy and remain in the property for life.
Speaking today, Billy Kane, Chairman, said; “We’re very comfortable with the quality of both our reversionary asset and loan portfolios developed over the last number of years. At a time when credit markets are all but closed it just does not make financial sense for a niche player like ourselves to continue to fund new lending. In that context, we believe the best approach is to temporarily withdraw our offering from the market. This of course has absolutely no impact on our existing customers. We expect to be in a position to reintroduce the products – for which there is now a proven demand – when normal credit conditions return.”
Billy Kane is a former Chief Executive of PermanentTSB.
