Brendan Burgess
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Central Bank press release today:
An Economic Letter entitled Mortgage modification in Ireland: a recent history considers the central role played by mortgage modifications. The key findings are:
· The scale of mortgage modification in the Irish market is larger than previously measured. At the five banks studied, close to 100,000 modifications were issued with at least one temporary arrangement between 2009 and 2016, with slightly over 100,000 having been issued a long-term sustainable arrangement (with it being possible for an individual mortgage to be counted in both categories).
· 90 per cent of all loans that defaulted between 2009 and 2016 and had exited default by the end of 2016, did so following modification.
· There was a rapid switch from modifications of a short-term nature to those of a more long-term, sustainable nature post 2013.This is important when we consider that permanent (or longer-term, more sustainable) modifications are associated with higher repayment probabilities than modifications of a temporary nature.
An Economic Letter entitled Mortgage modification in Ireland: a recent history considers the central role played by mortgage modifications. The key findings are:
· The scale of mortgage modification in the Irish market is larger than previously measured. At the five banks studied, close to 100,000 modifications were issued with at least one temporary arrangement between 2009 and 2016, with slightly over 100,000 having been issued a long-term sustainable arrangement (with it being possible for an individual mortgage to be counted in both categories).
· 90 per cent of all loans that defaulted between 2009 and 2016 and had exited default by the end of 2016, did so following modification.
· There was a rapid switch from modifications of a short-term nature to those of a more long-term, sustainable nature post 2013.This is important when we consider that permanent (or longer-term, more sustainable) modifications are associated with higher repayment probabilities than modifications of a temporary nature.