# 30,000 borrowers not engaging with their lenders?



## Brendan Burgess (1 Jun 2016)

[broken link removed]



This is higher than I had expected.

I had estimated that around 3% of borrowers were acting irresponsibly. With 600,000 borrowers, that would be around 20,000.

It would be good to know the current stock of borrowers classified as non-cooperating.

Some of those who were classified as non-cooperating, have since begun to cooperate and so would no longer be classified as non-cooperating.  There would have been others classified as non-cooperating before and after the period of the survey.


It's hard to get hard data, but it appears that there are around 11,000 cases of family homes before the courts.  So where are the other 20,000? Have they all begun to cooperate?

I don't agree with the classification of the 30,000 as "strategic defaulters" as suggested by the The Irish Times

"Bankers refer to them as strategic defaulters – those who have deliberately chosen not to engage with their lender in the hope or expectation that they will get a full or partial write-off of their loans. In many cases they are people who could afford to pay the loan but are playing a game of chicken with the lender.

There must also be a large number who have simply decided to ignore the communications from their banks in the hope that the problem would simply go away"

I am sure that there are a few people who are not engaging in the hope that they will get some sort of debt write-off through government action. But the vast majority are just frightened, irresponsible, disorganised or incompetent, what we would probably classify as "bad with money".


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## Gordon Gekko (1 Jun 2016)

Hi Brendan

I am aware of a number of cases where, if it went to court, there isn't a judge in the land who would classify the borrower as "non-cooperating". The banks in question are a shambles with regard to changing staff, losing correspondence, being uncontactable, ignoring firm proposals, and generally being unreasonable.

I would contend that the 32,000 number is a nonsense.

Regards

Gordon


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## Sarenco (1 Jun 2016)

Does the Central Bank bulletin actually say that ~32k borrowers were classified as "non-cooperating" at any particular point in time? 

Presumably a proportion of distressed borrowers are subsequently re-classified as "cooperating" having previously received a notification from a lender that they have been, or may be, categorised as "non-cooperating" over a particular reporting period.  In other words, it is presumably a fluid situation.

On the face of it, the proportion of ARAs that have been offered by lenders and accepted by borrowers looks pretty impressive (although I wonder are some of these ARAs being offered simply to meet Central Bank targets and are not really sustainable on a long term basis).

We know that a significant proportion of restructured loans end up in default again but even so we must be getting fairly close to the point where it is reasonably clear which loans can be successfully restructured on an agreed basis and which loan accounts are simply beyond redemption and need to be resolved through legal means.

The popular media narrative that banks are unreasonably vetoing reasonable ARAs doesn't appear to be reflected in the figures (although I have no doubt that Gordon is right that the ASUs can be frustratingly chaotic).


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## Brendan Burgess (1 Jun 2016)

It would be useful to get the following data:

What is the current stock of borrowers classified as non-cooperating?


Gordon Gekko said:


> I am aware of a number of cases where, if it went to court, there isn't a judge in the land who would classify the borrower as "non-cooperating".



Hi Gordon

I have no doubt that you are correct that there are some such cases. However, they wouldn't need to go to court. They would start by appealing the classification.



Only 5% appealed. So it does seem as if the other 30,000 are not co-operating. 

From my experience in the court, there are thousands of people paying nothing and not showing up in court. Occasionally,  a borrower shows up and claims that they are trying to engage with the bank but the bank won't talk to them.  The Registrar sometimes asks them how much they are paying. Usually, they are paying nothing and the Registrar asks them what they want to talk about so. 

Brendan


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