# 1/3rd of people  in over two years mortgage arrears have paid nothing in the last 6 months



## Brendan Burgess (30 Sep 2020)

The Central Bank has published a "Behind the Data" report which has a lot of interesting stuff.

These are mortgage arrears relating to the family home.

I have been arguing for years that the payment record is more important than the arrears record and for the first time they are publishing useful payment information.



One third of people over two years in arrears have made no payment in the last 6 months.

The higher their equity in their home, the more likely they were to make a payment.

Brendan


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## Leper (30 Sep 2020)

Hi Brendan,

Are these figures regarding mortgages only? If so, you may need to amend the heading to make the thread more clear.
If they are not mortgages only you still may wish to amend the heading.


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## Brendan Burgess (30 Sep 2020)

Hi Leper

It's in the forum on Housing and Mortgage Policy
The table refers to Loan to Value

But as that does not seem to be clear enough, I have edited the title.

I have edited the post to make it clear that it relates to the family home and not buy to let.

Brendan


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## NoRegretsCoyote (30 Sep 2020)

Take people with two or more years in arrears with an LTV below 50%.

A full 29% of them are not making payments.

This is ridiculous! What system on earth should tolerate this?


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## Brendan Burgess (30 Sep 2020)

Hi NRC 

I found those <50% LTV figures curious.

If I have a cheap tracker and never want to trade up again, it might be worth my while defaulting. 

If I have a house worth €400k and a mortgage of €200k on an SVR of 3%, I am going to do my very best to make my repayments.  I am not going to get a write down. So there can't be any element of strategic default for these guys.

So if they are not paying, they can't.   Or maybe they are just so disorganised. Or maybe they are separated joint owners who are in dispute. 

From the bank's point of view, it's not too serious a problem.  The interest continues to accrue.   The Central Bank rules will cause them a problem as they must classify it as an NPL. But they can handle a certain percentage of NPLs. 

Brendan


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## Sarenco (30 Sep 2020)

There are some truly shocking statistics in that paper –

Eight per cent of all principal dwelling house (PDH) mortgage accounts in Ireland had some level of arrears when entering the pandemic
A significant number of mortgages in arrears greater than five years, with 1 in 12 in arrears over ten years
Almost one-third of all past due accounts are over five years in arrears, while eight per cent are more than ten years in arrears
Of the 41,061 accounts currently in arrears of over 90 days, 64 per cent are in arrears for more than two years, up from 54 per cent in 2015.
One-third of those in long-term arrears making no mortgage repayment
The 2018 review of effectiveness of the Code of Conduct on Mortgage Arrears (CCMA) found that as many as two-thirds of those in long-term arrears, and not part of a restructure, were classified as not co-operating. This high-level share of non-engagement has reduced somewhat and now stands at just over half.
Just over one-quarter of borrowers in the legal system are there over five years.
 Is it any wonder we have some of the highest mortgage rates in Europe?


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## Brendan Burgess (30 Sep 2020)

NoRegretsCoyote said:


> Take people with two or more years in arrears with an LTV below 50%.
> 
> A full 29% of them are not making payments.
> 
> This is ridiculous! What system on earth should tolerate this?



Thinking further about this...

I suspect that there are very few actual cases in this cell. I will ask the author of the report.

Brendan


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## Brendan Burgess (30 Sep 2020)

Sarenco said:


> There are some truly shocking statistics in that paper –



It is very hard to pick a headline from that list! 


Brendan


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## Pinoy adventure (30 Sep 2020)

Sarenco said:


> There are some truly shocking statistics in that paper –
> 
> Eight per cent of all principal dwelling house (PDH) mortgage accounts in Ireland had some level of arrears when entering the pandemic
> A significant number of mortgages in arrears greater than five years, with 1 in 12 in arrears over ten years
> ...





Would there be a % of good loans vrs bad loans out there ?


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## WizardDr (1 Oct 2020)

Banks go on about 'strategic defaulters' and there are some.

That said the rehousing cost has never been calculated or disclosed.

It has been my view that the State should take over the mortgage and agree the payment they would pay if the family were homeless. [CASE 1]

This of course would have people screaming that it is madness.

However - In the US the notion of 'jingle mail' arises where the keys are posted in the letter box and the occupier cannot be pursued for the outstanding balance.  Noting that this is the alleged most neo-liberal state on the planet then we could adopt that position NOW [Doherty Pearse DO NOT COPY].  This should be the case going forward.

For existing cases assuming we cannot make the law retrospective then CASE 1 would be to make the rental payment they would pay the family.  

Case 2 Banks will only have the  property to rely on - God Bless America.


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## Peanuts20 (1 Oct 2020)

So in the midst of a global pandemic with the EU plunging into recession and over 500k people in Ireland losing their jobs permanently or temporarily and many more taking wage cuts,, two thirds of people in arrears have still been able to make payments to their mortgage. There is an argument for saying that that is not bad given the current circumstances. "Two thirds of people in arrears still making mortgage payments in the midst of a pandemic" would also have been an accurate headline

What would make the data really relevant is what did the figures look like 12 months ago?


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## Sarenco (1 Oct 2020)

WizardDr said:


> However - In the US the notion of 'jingle mail' arises where the keys are posted in the letter box and the occupier cannot be pursued for the outstanding balance.


That is not true in the vast majority of US States.  Only 12 US States are considered non-recourse States.

Guess what?  Non-recourse States have the highest levels of defaulters.  And the highest mortgage rates.

Regardless, most Americans would think you were joking if you told them that in Ireland it is quite common for a defaulting borrower to be allowed to continue living in a house for 10 years or longer after defaulting.


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