canicemcavoy
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From politics.ie ([broken link removed]):
30,000+ in arrears; 387 repossessions
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its not a lot of repossessions 387 considering there are 36'438 in arrears of 90 days...... just around 1%.
Is it because banks are being really accommodating to people who can't manage to pay ? Or are there legal reasons why banks are reluctant to repossess ?
In other countries, are banks more likely to step in and repossess when house owners are in arrears ?
Is it because banks are being really accommodating to people who can't manage to pay ? Or are there legal reasons why banks are reluctant to repossess ?
In other countries, are banks more likely to step in and repossess when house owners are in arrears ?
canicemcavoy
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I believe that there had been an agreement that banks would give 18 months of leeway before instigating any action. I imagine this 18 months is running out for a lot of people.
Was it not 12 months and under review to be increased? I could be wrong though.
I think the main reason that banks are reluctant to drastically increase repossessions is because the resulting increase in supply/firesale of houses would add to the downward pressure on house prices. This would further decrease the value of the underlying assets of their mortgage books, adding more need for captial. All this is, is kicking the can down the road and hoping for a miraculous recovery in house prices.
canicemcavoy
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The following shows the increase in the last 4 quarters:
The following shows the increase in the last 4 quarters:
Very interesting. Number of repossessions is fairly level, but number of mortgages in arrears (at all time frames) is increasing. Does look like number of repossessions is being kept down.
What's the point in repossessing a house if the occupants are paying something. You're just left with an asset worth less than the loan on the books but now you have ex-owners who see no real benefit in paying anything at all because there is no light at the end of the tunnel now that the house is gone. I'd say the banks are only repossessing properties where the owners are paying nothing at all.
I can only see the numbers getting worse. Rates are rising independently of the ECB and there will also be further fiscal tightening in the December budget. The net effect is that mortgage debt will become harder to service for many, and for the economy as a whole consumption expenditure will fall with the resulting knock on effects.......and this is before we even mention ECB rate rises going forward. A double dip recession is inevitable imo.
The following shows the increase in the last 4 quarters:
Nice stats
Anyone manage to find out what the stats are for the United Kingdom ? It would be nice to know are we doing worse than other countries.
Over 95% of mortgages are not > 90 days in arrears........it's not too bad is it ?
19 out of 20 people are keeping their mortgages under control. Sounds far from a crisis.
I could be wrong, but i think repossession is only ordered when occupants don't make any repayment or simply abandoned their property, hence the low amount of repossession.
J
Joe Q Public
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Many of those figure of 387 could be voluntary surrenders. A court order is still required in those cases. The number of actual repossessions is very much lower.
millieforbes
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council of mortgage lenders - cml.org.uk - statistics or media sections of the site
canicemcavoy
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It's hard to compare like with like - here there has been an explicit 18 month moratorium on any kind of action; this - as far as I know - hasn't been the case elsewhere.
Don't let the stats confuse you. 36,000 already in trouble - 4000 more than last March. Trending towards 50,000 by year end given we are only seeing data for the first six months. The banks mortgage books are skewed towards younger higgher value loans at higher boom time LTV's - so its likely we are seeing motsly younger loans going bad.
Consider also the age of these loans and their average size at almost 180k each. If most are in negative equity at say 40% off peak values then on average they will be in quite serious negative equity.
Eg. say an 80% LTV issued late 2007 on a house costing 300k - negative equity will be e60k before costs. LTV 100% neg equity will be 120k.What chance have these borrowers of paying off the balaonce owing if they sell up and move on or strategically default and walk away? Banks are facing huge losses here. Lift the bonnet on the stats and you will see how banks are facing big losses per loan. Take the 80% LTV above - losses before costs are 25%. On the 100% LTV they jump to 40%.
US experience of modified loans - adjusting repayments to suit smaller wallets - is that a third fall into arrears again. So apart from the 36,000 in serious trouble there are the other 30,000 or so which have been modfied and may still go bad. It seems then that loans in arrears or modified are closer to 10%.
4.6% arrears is a very bad figure that is about to get a lot worse. Bad for the people who owe money and the banks who are owed money.
Consider also the age of these loans and their average size at almost 180k each. If most are in negative equity at say 40% off peak values then on average they will be in quite serious negative equity.
Eg. say an 80% LTV issued late 2007 on a house costing 300k - negative equity will be e60k before costs. LTV 100% neg equity will be 120k.What chance have these borrowers of paying off the balaonce owing if they sell up and move on or strategically default and walk away? Banks are facing huge losses here. Lift the bonnet on the stats and you will see how banks are facing big losses per loan. Take the 80% LTV above - losses before costs are 25%. On the 100% LTV they jump to 40%.
US experience of modified loans - adjusting repayments to suit smaller wallets - is that a third fall into arrears again. So apart from the 36,000 in serious trouble there are the other 30,000 or so which have been modfied and may still go bad. It seems then that loans in arrears or modified are closer to 10%.
4.6% arrears is a very bad figure that is about to get a lot worse. Bad for the people who owe money and the banks who are owed money.
Interest rates are very low at present unlike the 80's when interest rates were high, therefore, people repayments are low to the lenders. If home owner do not have to move then I cannot see a problem for them provided that they have an income and not made unemployed.