# The arrears stats for the non-bank lenders



## Brendan Burgess (13 Jun 2016)

The Central Bank disclosed the arrears stats for the non-bank lenders separately from the total figures for Quarter 1 2016. 

PDH mortgages only 


So, 6% of the banks' mortgages are in arrears over 90 days, compared with 38% of the non-banks' mortgages.


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## Brendan Burgess (13 Jun 2016)

The non-bank lenders don't seem any more aggressive in repossessing properties despite their public reputation. 



The percentages in the above tables are percentages of those in arrears over 720 days.

They may actually overstate the figures for the non-bank lenders as the 15 "repossessions" include PDHs and buy to lets whereas the figures for the banks are for PDHs only.

This ties in with our experience of the repossession courts. We don't see the non-bank lenders there as much as we might expect.

There could be a timing issue here.  When a loan is sold, the new owner must be registered in the Land Registry and seems to take a long time.  

If legal proceedings are active at the time of the sale, the buyer must apply to the court to change the name of the plaintiff. They must notify the borrower of the upcoming court case. In many cases, the borrowers can't be served, so there are very long delays.


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## Brendan Burgess (13 Jun 2016)

*Who are the non-bank lenders? *

Sold by Irish Nationwide  13,000  (PDHs and Buy to lets, 60% arrears, no trackers.)

Sold by BoI to Dilosk 2,000  (PDHs and buy to lets, all performing, no trackers) 

[broken link removed] sold to Tanager   (Commercial and residential; all non performing, almost all trackers - £610m face value)

Bank of Scotland to Lone Star   4000 managed by HML 

Bank of Scotland to CarVal  2000 managed by Pepper 

Start Mortgages to Lone Star 

Investec to Lone Star


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## Sarenco (13 Jun 2016)

Seamus Coffey has a good analysis of the mortgage books acquired by the various non-bank lenders on his blog.

Apparently non-bank lenders repossessed a grand total of 15 properties on foot of a court order in the first quarter of 2016.  This represents 0.1% of the ~13,000 accounts they have that are more than two years in arrears (and these entities have had these accounts for at least 18 months now). 

http://economic-incentives.blogspot.ie/2016/06/mortgages-with-non-bank-lenders.html


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## Brendan Burgess (13 Jun 2016)

Hi Sarenco 

Your post crossed with my second post, which I was preparing when I got called away. 

Brendan


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## Brendan Burgess (13 Jun 2016)

Fiona Reddan reported on it in Saturday's Irish Times 



"Non-bank lenders, or so-called “vulture funds” may not be the most popular players in town. However, latest mortgage arrears figures from the [broken link removed] show that these so-called funds are repossessing properties at a lower rate than their banking counterparts."


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## Sarenco (13 Jun 2016)

Brendan Burgess said:


> There could be a timing issue here.  When a loan is sold, the new owner must be registered in the Land Registry and seems to take a long time.
> 
> If legal proceedings are active at the time of the sale, the buyer must apply to the court to change the name of the plaintiff. They must notify the borrower of the upcoming court case. In many cases, the borrowers can't be served, so there are very long delays.



That's a good point Brendan.  It will be interesting to see if there is a significant uptick in repossession orders in the coming quarters, as these additional delaying factors related to the transfers start to fade.

Would you have any sense, roughly, what proportion of the relevant properties are vacant/abandoned?


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## Brendan Burgess (13 Jun 2016)

Sarenco said:


> Would you have any sense, roughly, what proportion of the relevant properties are vacant/abandoned?



In 15% of cases where an order was granted, it was noted that the house was vacant or probably vacant. 

However, the issue was not raised in most of the cases where orders were granted. 

Where an order was not granted by consent, the borrower was usually paying nothing and rarely attended court. I suspect that many of these were vacant as well. 

So I would guess that around 20% to 40% of orders granted are for vacant houses. 

Brendan


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## Sarenco (13 Jun 2016)

Brendan Burgess said:


> So I would guess that around 20% to 40% of orders granted are for vacant houses.



Wow!  That's a lot higher than I would have guessed.  

It seems to me that the delays encountered by lenders in repossessing properties is actually contributing to the current housing crisis (and not the other way around).


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## Brendan Burgess (13 Jun 2016)

There are around 11,000 legal proceedings in the courts system at the moment. We estimate that speeding up repossessions of empty houses (e.g. no Practice Direction Adjournments where the borrower does not attend court and hasn't paid anything) could make between 2,000 and 4,000 houses available for housing.

I attach our submission to the Oireachtas Housing and Homeless Committee. Surprisingly, we weren't invited to give evidence. 

Brendan


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## Sarenco (13 Jun 2016)

Brendan Burgess said:


> We estimate that speeding up repossessions of empty houses (e.g. no Practice Direction Adjournments where the borrower does not attend court and hasn't paid anything) could make between 2,000 and 4,000 houses available for housing.



Interesting, thanks. 

To put that number into context, the latest estimate is that there are currently less than 900 families in emergency accommodation.


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