Mortgage Arrears: March 2011

The latest quarterly report on mortgage arrears from the Central Bank is available here. The report shows a continuation of the steady increase in the fraction of mortgages that are more than 90 days in arrears. This fraction rose from 5.7 percent in December to 6.3 percent in March, in line with the previous increases over the past year.

49,609 mortgage accounts have been in arrears for more than 90 days. In addition, 62,936 mortgages have been restructured with 36,662 mortgages that have been restructured but which are classified as performing and not in arrears and 26,274 again in arrears.

10 replies on “Mortgage Arrears: March 2011”

@Karl Whelan
As Namawinelake alludes to, it is not clear that “Of the 49,609 mortgage accounts that were in arrears for more than 90 days, 26,274 have previously been restructured.” Some of them may be less than 90 days in arrears.

One interesting thing – 6% of mortgages by number are in arrears, but if you included the outstanding interest, 9% by value… (I assume the outstanding arrears are in the balance or are otherwise losses given the cost of funding for the banks).

Whatever way you look at these figures, that’s a lot of misery for many individuals/families.

Interesting that the repossession figures are so low in comparison (even with a 12 month moratorium) but I guess that’s a political directive (don’t spook the horses by lots of people seeing neighbours thrown out of their houses) and will change if the Irish property market ever turns up and banks can see some value in taking the property rather than continuing to bleed as much as they can out of people kept on life support until it is no longer useful to them (and having worked in that industry, believe me when I say that I am not being cynical).

I’m actually surprised that the figures aren’t higher given the number of people who have suddenly found themselves unemployed in the past couple of years who likely had a mortgage. I would have thought the percentage would be high given that the banks, government and even our parents have spent the past twenty years telling us that rent is money down the drain and we must buy our own house. Does anyone have an educated guess as to how many of the recently unemployed lost their job and held a mortgage?

The last time I looked, eighteen months ago, only some 3% of the unemployed were in receipt of mortgage interest supplement – anyone know if that figure has changed and to what extent the taxpayer is putting money into the banks via this channel?

I’m out of touch with what’s happening vis-a-vis changing the bankrupty laws in Ireland so that individuals can find some relatively humane way out of the mess they are in. Anyone have a recent update on features or timetable?

Where can I find comparable statistics in the UK? Google searches turning up lots of dross..

@Sarah Carey – you could ask a mortgage provider or an estage agent over there. They would have these sorts of stats available to them and being the respected pillars of society they are (like bank managers in the olden days), you can expect the unvarnished truth from them…… lol. I find it hard to believe even these Irish stats tell the full story. They will have been massaged in some way, shape or form.

In one of his presentations to the IMF last year, Olivier Blanchard cited the following factors when analysing the prospects of recovery in the US housing market:
1- Mortgages less than 90 days in arrears.
2- Mortgages more than 90 days in arrears.
3- Mortgage which have defaulted and are in the process of being enforced
4- Houses in negative equity

Whilst no. 4 overlaps with nos. 1, 2 and 3, it was also seen as being a useful indicator of the back-log.

@ Zhou: “…the prospects of recovery in the US housing market”.

That would be zero on the present trajectories. Commentators in US (ex: Realators) are very pessimistic. Anything from 5 – 15 years being quoted for ‘bottom’. Problem with ‘average’ incomes declining, and food and energy costs increasing. Varies from state to state. Some are fine, others are in deep trouble. Looming problem with ‘illegal’ repossessions is also an issue for purchasers of properties auctioned on steps of court’s as many titles were not registered according to state laws.

Brian Snr

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