Key Post Q4 Arrears statistics from the Central Bank

Brendan Burgess

Brendan Burgess

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Summary of Principal Private Residences

|Accounts|Homes| Arrears
Less than 90 days|40,900|33,000|€73m
90 -360 days|36,000|29,000|€262m
Over 1 year|27,000|21,600|€501m
Over 2 years|33,600|27,000|€1.4 b
Total|137,000|110,000|€2.2billion
Note: These figures do not cover all mortgages as they exclude mortgages which have been sold to institutions not regulated by the Central Bank. It is likely that the rate of arrears on such mortgages is actually higher.

The Central Bank data refers to "mortgage loan accounts". Due to remortgages, there are approximately 5 mortgage accounts for every 4 homes.



Compared to 30 June 2013

Comparison is meaningless as the data are not comparable


Putting mortgage arrears in perspective

Total mortgage arrears accumulated since 2006| €2.2 billion
Total mortgages outstanding |€107 billion
National Debt increase during the same period - estimate| €150 billion
Cost of Anglo Bailout| €30 billion
Mortgage arrears and other housing needs

Total number of homes in arrears over 90 days|77,000
Total receiving Rent supplement| 96,000
Total in social housing|155,000
 
Summary to include restructures

|Accounts|Homes
In arrears and not restructured |98,418|78,000
Restructured, but still in arrears|38,416|31,000
Restructured and not in arrears|45,637|36,000
Total|182,471|145,000

Restructured accounts still in arrears, may have arrears since before they restructured, or they may have fallen into arrears on their restructured mortgage. More information here: Restructuring is generally successful
 
The number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell for the second consecutive quarter in Q4 2013. A total of 136,564 (17.9 per cent) of accounts were in arrears at end Q4 2013, a decline of 3.3 per cent relative to end-Q3, although the size of the decline was impacted by asset sales over the quarter.
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So a lender sold some mortgages during the quarter. These are omitted from the figures as the purchaser is not a regulated body. That means that these trends are not reliable.


The Central Bank won't tell me which lender sold mortgages and how many, but it's safe to assume that they were non-performing mortgages or a book with a higher proportion of non-performing mortgages.

This problem will get worse next quarter (i.e. this quarter) when Bank of Scotland sells its mortgage book and Danske Bank sells its non-performing mortgages.

All we will be able to say is that "There are x mortgages in arrears among the lenders which are supervised by the CB". We will not know the total.

Here is my correspondence with the Central Bank. A follow on phone call was met with "We can't provide any further comment"

I am a bit confused - do they include mortgages sold by Bank of Scotland Ireland or those sold by Danske Bank?

"Residential Mortgages issued by Non-Bank Lenders Non-bank lenders accounted for 2 per cent of the total stock of residential mortgage accounts outstanding at end-December 2013 (2.5 per cent in value terms). A total of 9,050 mortgage accounts issued by these lenders were in arrears of more than 90 days at end-December. The outstanding balance on these accounts was just under €2 billion, equivalent to 55 per cent of the total outstanding balance on all mortgage accounts issued by non-bank lenders."
I take it that these are what we call the sub-primes which are supervised by the CB.
But what about mortgages which have been sold?
It would probably help if the notes included a list of lenders whose mortgages are included and which ones are excluded.
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and their reply

[FONT=&quot]The asset sales refer to mortgage loans that were sold and are therefore not included in our end-Q4 statistics. Due to confidentiality restrictions, we cannot give any specific details on the quantity or value of mortgage loans that were sold. While these sales had an impact on the magnitude of the decline in arrears this quarter, they did not change the overall trend.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]With regards to the non-bank lenders, yes, these relate to retail credit firmswho are authorised as mortgage lenders.[/FONT]
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Brendan Burgess said:
Charlie Weston reports today that around 3,000 non performing mortgages were sold by Bank of Scotland in December.
So that accounts for the bulk of the improvement.
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If he knows the were BofS loans how come the CB is quoting you confidentiality rules?
 
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