# IMF paper comparing mortgage arrears resolution in Ireland, Spain and U.S.



## Brendan Burgess (21 Mar 2015)

An interesting report mentioned by Cliff Taylor in today's Irish Times Crunch time on mortgage arrears

Resolving Residential Mortgage Distress: Time to Modify?; by Jochen R. Andritzky; IMF Working Paper No. 14/226; December 1, 2014
http://www.imf.org/external/pubs/cat/longres.aspx?sk=42577.0

_The US and Spain both moved quickly enough into foreclosures – or repossessions – with 15 per cent of mortgage accounts being foreclosed since 2007 in the US and more than 4 per cent in Spain. If we had foreclosures at even Spanish levels – and the crisis here was worse – some 30,000 houses would have been repossessed.

Instead the latest figures indicate fewer than 4,000 homes were repossessed by the end of last year: 1,100 via court-enforced orders and the rest via voluntary repossessions. Others will have sold under pressure from the banks. _


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## Delboy (21 Mar 2015)

> The political problem is that there is no “big bang” solution. This is outlined clearly in the IMF paper, which says that some kind of widespread programme of across-the-board debt relief is likely to be expensive and ineffective – and also to cost the banks.


That should be thrown at every Hall et al every time they start pulling at the usual heart strings


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## Gerry Canning (23 Mar 2015)

Delboy said:


> That should be thrown at every Hall et al every time they start pulling at the usual heart strings


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A few comments;
1. Could it be our arrears situation was/is worse than USA & Spain.
2. Could it be that if arrears were tackled promptly that our Banks (notwithstanding funds already in by us) could not have survived the extra cold shock of repossession write-offs.
3. Could it be that prompt repossessions would have created an unmanageable housing/social issue.
4. Could it be that our Banks didn,t/don,t have the skill base to manage arrears.(up to 2008 their skill was shovelling out funds , not arrears management).
5. Because of delay in arrears sorting (by borrowers & lenders) and with economy more robust , that by delay and increase in home prices and low rates we may escape the worst losses for Banks and only have  hard core repossessions . (if so, it is luck over management)


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## Newbie-employee (23 Mar 2015)

I'm normally not one in favour of kicking cans down the street, but as a nation we've done this - have we escaped the worst ?  Was the inevitable made more palatable by delays?


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