Ulster Bank has written to 2,000 customers who are neither contributing to their home loan nor discussing the issue with the bank in any way, seeking to reassure them that they won’t necessarily be pursued by the bank for all residual debt on their homes

The letter tells customers that if they sell their homes and they qualify for social housing, the bank will not pursue them for any residual debt once the sale proceeds have been set against their mortgage arrears.

If customers do not qualify for social housing the letter says the bank will work with them to agree what it calls a “fair process”  with the implication that this may involve some form of write-off of residual debt depending on circumstances.

While other Irish banks have written off some mortgage arrears as part of resolution processes for customers who definitely cannot afford to pay - Ulster Bank is the first bank to explicitly tell a particular customer segment in advance that it may write-off debt.

The bank says it has helped 12,000 customers out of arrears to date and back to normal payments on home loans and that an additional 10,000 customers are currently in some form of engagement process or arrangements.

The letter reaffirms that if the bank agrees with a customer that there is a reasonable chance of them meeting their obligations over time, they may be offered a combination of reduced repayments, lower interest rates or a longer time to pay their loan.