Mortgage Arrears: June 2010

The apparently newly branded Central Bank of Ireland has released the latest summary data on mortgage arrears here.  

A total of 36,438 mortgage accounts were in arrears over 90 days in June 2010, up from 32,321 in March. This meant that 4.6 percent of mortgages were in arrears, up from 4.1 percent in March and 3.3 percent in September 2009.  However, mortgages in arrears have a higher average balance (€190,000 compared to an average of €149,000 for the full sample) so the 4.6 percent of mortgages in arrears accounted for 5.9 percent of the total outstanding mortgage balance.

The arrears on the overdue loans totalled €559 million in June. Those in arrears over 180 days are, on average, behind on 10 percent of their total balance.

11 replies on “Mortgage Arrears: June 2010”

It would cost less than €4 billion to cut those loans in half.

How much are we giving Anglo? Wouldn’t helping out 40,000 families be a better use of that money – morally and economically?

I estimate that loan losses – irrecoverable mortgage debt(negative equity) amounts to somewhere between €2.2bn and €3.2bn of the €6.9bn troubled loans reported on depending on the mix of original LTV’s and assuming a 40% peak to trough drop in values. Underlying loan losses range between €1.58bn and €2.5bn. Assuming of course that either the homes are repossessed, short sold or loans are modified (reduced) to current market values.

It looks as if lenders are looking at losses of between 25% and 40% per loan. Applying a Nama style haircut would result in discounts of between 30% and 50%.

While overall it’s reported that 4.9% by number are in arrears this applies to the entire book which includes older loans.

From 2005-2008 IBF members issued 673,616 loans totalling 130.8bn of these 370,831 were issued to first timers, movers and remortgagers totalling 87.3bn. Average loan issues ranged from 203k to 270k in this time. The overall loan numbers of 789,814 with debt of 117.7bn includes this cohort of borrowers most of whom borrowed at 80-100%.

Adjusting for the probability that most loans in arrears are younger rather than older increases the % in arrears of loans issued between 2005 and 2008 to close to 9% and not the 4.9% global average.

@Kevin Lyda adjusting loans to current market value assuming affordability would cost e€2.2 and €3.2bn – for the 36,000 in trouble last June. There’s no data for the numbers in arrears less than 90 days or the number who have been cut some slack through foreberance tactics. The CB data may or may not include some modified loans.

For 36,000 loans, forebearance is about as useful as a foot pump on the Titanic – that is unless loan modifications includes debt write down to affordable levels. Negative equity ranges between €43k (80%LTV) and €70k (100% LTV) per loan at a 40% peak trough reduction in home values. Most of these borrowers will also have distressed personal debt.

the rate hikes from Q1&2 have probably not fed into the figures, if they drove people over the edge it wouldn’t start to reflect until the mar/apr payments and therefore it was only those that were already going under who were affected in these figures. if the current trajectory doesn’t change we can expect to have about 50,000 households in arrears by early next year. what a mess!


Why help the vain stupid people who bought above their station? What about those who sold to them?

Poverty should flourish!

Learn the lesson, peasants!

Borrow and repent! Failure allows time for reflection. What lessons are you going to learn if everything is fixed for you? Freedom is earned! What you want is a nanny.

A rising tide? What about a falling tide? And a tsunami? Eventually, all trust in systems is destroyed. China has peasants too. They hoard cash. They do not trust the state. The efforts of gombeens will destroy all faith in the state too. Who gains?

Love the messenger! I bring the truth. Suck on it, even if it is bitter. Learn your lessons!

Arrears are doubling every two years. As prices are halving every 5 years. Fascinating.

What is the LTEV of that? Think!

Clearly demonstrating that something is rotten in America.

He calls on economists to help to clarify the situation!!!!

Nothing new, except the official subterfuge about land values. Recall 9/11 anyone? The NYTC was actually negative in value. Negative! The cost of demolition of an asbestos filled building, in NY, was astronomical. The building was rusting as sea air and Fe/Al combo helps to cook it.

So, this is a good yarn, luckily (!), luckily, they got human volunteers to breathe in asbestos fibres while removing particles, all paid for by the NY and Fed taxpayer! Subsequent health costs all met by the taxpayer. Most of em ancestral Irish. Thick Micks! No loss then? How much compo did Silverstein get? He held the site only for a year before the demolition. Got in a Saudi crowd to do it, very cheap! Bit untidy though.
Talk about land speculation! Who’d a knowed it! Reads like fiction, don’ it?

Yesterday’s figures really highlight the need for the Expert Group to make meaningful, long term recommendations to solve this crisis. All of the interim recommendation were short-term and don’t deal with the elephant in the room – negative equity. Looking at the Quarter 2 figures against when the Financial Regulator first started producing proper quarterly stats last year, there has actually been an increase of nearly 40% in the number in arrears from September 2009 to June 2010. Bearing in mind the effect July and August’s interest rate increases is going to have on homeowners, it will probably be Quarter 1 and Quarter 2 2011 when we really see a big increase in the number of homeowners in default. No light at the end of the tunnel for the almost 25,000 families who haven’t been able to repay their mortgage in nearly 6 months.

So the explosive charge of financial ammonal of domestic mortgages is gently detonating a few milligrams at a time: final result will be same if it went off in one go. Social and political devastation.

Expect legislators to do the ‘right thing’ – protect their votes. Financial institutions have no votes, but their unfortunate customers do! When is the next gen election due?

Please reflect: the financials had a specific policy to lend (recklessly!). It is not reasonable to place the liability for this financial, social and political disaster onto the customers who (foolishly, in many instances) accepted the mortgage loans. Who benefitted? How did prudent mortgage lending degenerate into a Ponzi scheme that would fail – with a probability of 1.0?

What is the ‘default option’ for loans that cannot (not, will not) be repaid? Yes, I thought so!

B Peter

“Expect legislators to do the ‘right thing’ – protect their votes. Financial institutions have no votes, but their unfortunate customers do! When is the next gen election due?”

And yet financial institutions across the world have received hundreds of billions of the voter’s money – all while the average voter is getting creamed financially.

Either voters are dumb or politicians are dumb. More and more I’m leaning towards the former.

Huffington Post published this.

B Peter
Good stuff as always. Except for the 4th dimension. As this is slow, it really damages the real resource of every economy: people. Stress, take this from me, personal experience of working with both excellent people and high ranking, rhymes with, bankers, destroys brain chemicals and results in depression. That has long lasting effects that #@$^%%$ economists neglect. It simply is ignored!

The slow, sssllooooowwwwwwww pace is going to kill more people and families than necessary. All to maintain VANITY!

It is just as well I am here in Australia, but someday, after I am diagnosed with a terminal illness……..

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