Shock Horror: "74% of mortgages in 90 days arrears not restructured - Finance"

Brendan Burgess

Brendan Burgess

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Here is how today's figures from the Department of Finance were reported on RTE.ie

74% of mortgages in 90 days arrears not restructured - Finance

Department of Finance figures show there has been no change in the number of mortgages in arrears which have been given restructuring arrangements by banks in the first three months of the year.
The data shows that at the end of December 74% of mortgages in arrears of more than 90 days had not been restructured. By the end of March, that figure was unchanged.
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I appreciate that RTE online reports the news very quickly but this sort of nonsense should be corrected quickly. RTE has turned a good news story into a bad news story.

Here is the press release from the Dept of Finance:


And here is my summary of the figures for home loans

All home loans and not just those over 90 days in arrears – excluding buy to lets



|31 March 2014| 31 Dec 2013 |issued in last 3 months
Term extension|14,872|14,568
Arrears Capitalisation|18,030|13,975
Split mortgages|10,040|6,239
Other|19,123|16,406
Total permanent restructures|62,065|51,188|+10,877
These data are consistent with what is happening on the ground
People who engage with their lenders are getting generous restructuring deals.
Richie Boucher told the Oireachtas Finance Committee that they have made offers to 9 out of 10 people who have engaged with them.

So why are mortgages over 90 days in arrears not being restructured?

|31 March 2014|31 Dec 2013|issued in 3 months
loans >90 days restructured|20,509|20,556|-47
Many mortgages in arrears over 90 days have been restructured, so why have the figures not come down?

Because those mortgages which were less than 90 days in arrears at the end of December which have not been restructured have now moved into the >90 days in arrears classification.

It will be interesting to see how the other media report this very positive data.
 
Here are the actual highlights from the Department of Finance's report

Key highlights
 Engagement between consumers and lenders has led to 62,065 permanent mortgage restructures, an increase of 2,397 accounts on the end of February and 16,888 accounts on end Q3 2013.

 The number of mortgage accounts in arrears of greater than 90 days has fallen from 81,156 to 78,435, a drop of 2,721 accounts when compared to the end Q3 2013, and a fall of 1,524 when compared to end February.

 Total mortgage accounts in arrears (all arrears 1 day past due) continues to fall. The number of accounts in this category has fallen by 827 accounts when compared to the end of February.


 Total temporary restructures continue to fall, indicating a move towards a greater utilisation of permanent restructures.

 The number of split mortgages continues to increase with 10,044 split mortgages in place at the end of March.
 
Brendan Burgess said:
Here are the actual highlights from the Department of Finance's report



 The number of mortgage accounts in arrears of greater than 90 days has fallen from 81,156 to 78,435, a drop of 2,721 accounts when compared to the end Q3 2013, and a fall of 1,524 when compared to end February.

.
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However from your figures above 10,877 have been restructed over the past 3 months so these would be removed from the >90 day arrears? This means there was over 8000 new mortgages going >90 days. So over the next 2/3 years we could have 50000-80000 additional mortgages moving into serious arrears.

I would also be very worried about the mortgages that are classified as restructered. 4000 of the 10,877 of these are "Arrears Capitalisation" meaning higher mortgage repayments when they couldn't meet the original lower repayments.
 
OK, RTE has updated its report as a result of my complaint. They have kept the same misleading heading, but added in this bit at the end:

However, in a more positive development the figures showed that many banks were giving people restructures before they get into arrears.



At the end of last year a total of 45,000 restructures had been granted by the six main lenders, however, this had reached 62,000 by the end of March.
A key growth area were split mortgages, of which there were 10,000 by the end of March.
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docker said:
However from your figures above 10,877 have been restructed over the past 3 months so these would be removed from the >90 day arrears?
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No. The permanent restructures were offered to all customers - those who were not in arrears, those less than 90 and those more than 90.

The number in arrears over 90 days remained relatively static in the three months, we can't tell how many new ones went in and how many existing ones came out.

Brendan
 
Brendan Burgess said:
Here are the actual highlights from the Department of Finance's report

The number of mortgage accounts in arrears of greater than 90 days has fallen from 81,156 to 78,435, a drop of 2,721 accounts when compared to the end Q3 2013,
Click to expand...

The Q4 2013 data doesn't include the mortgages sold by IBRC to private funds which takes the shine off those numbers. Fitch also thinks things aren't great !!
 
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