Press Release:
Number of Ulster Bank Customers in Arrears of 90 Days or More Decreases for 12 months
Fair Solutions Keep Customers in their Homes
Ulster Bank provides the following update on its progress to assist mortgage customers in arrears.
Customers
Since March 2013, the number of mortgage customers in arrears of 90 days or more has fallen month-on-month – a trend which is not seen elsewhere in the market. Ulster Bank has invested in people and systems and has developed fair and attractive solutions to make it easier for customers to stay in their homes and the communities they have chosen by entering into suitable payment arrangements. Over the past twelve months, 2,500 customers have moved out of arrears of 90 days or more.
Ulster Bank also focuses on customers in pre-arrears to try to help customers through early-stage problems. The hardest payment for a customer to miss is the first payment and we want to be there to work with them to avoid the problem building up.
For those customers with payment difficulties who are engaging with us, we have contact with them four times in a typical month (three outbound calls, one inbound call) and with some we have a face-to-face meeting. Often these calls are made to proactively ensure that the customer remains on track with their current arrangement, has all the support they need and to early-identify any new issues. Others will represent first-contact with customers who need our support and we work with them to enter into an arrangement. We also send 11,000 letters per month to customers to encourage them to engage with us to find a solution. We have almost 200 people on the phones who typically have over four years experience who know how to help and who recognise that things have to be viewed on a case-by-case basis. We have also increased our field team to 78 experienced people who are available to speak to our customers face to face if that is their preference.
As well as speaking to our customers directly we will discuss matters with any representative that they prefer. However we have no exclusive or specific arrangements with any particular body though we are supportive of anyone who we believe can improve engagement between customers and their lenders.
Solutions
We believe that we have a responsibility to find the best solution for our customers but this means all our customers - those keeping their mortgage current as well as those in difficulty. Of course we want to help but offering overly-generous solutions which can’t be made available broadly can cause issues. What we offer to our customers is always based on what they can afford, when you take other reasonable living expenses into account. However we are very clear that the mortgage has to be viewed as a priority debt over unsecured loans.
While we are happy to offer split mortgages, our customers prefer Ulster Bank’s innovative ‘Economic Concession’ product. This solution features a discounted interest rate, as low as 0.5%, over varying durations. We also offer solutions such as capitalisation, term extension and probate warehousing.
Targets
Ulster Bank has worked on the critical issue of mortgage arrears alongside complying with the CBI targets. The UBIL Board has agreed an overall approach to managing customers with genuine payment difficulties and it’s clear that approach is working well. While we have met the targets so far, they are not the only goal for us. Indeed, we have previously expressed concern that they may not drive meaningful help for customers based on their own unique circumstances. Some problems are short-term issues that impacted the customer and as a result, a temporary arrangement may provide a permanent solution.
Legal
There is a cost to living in a home, whether a mortgage payment or rent. While the majority of our customers recognise this, even as recently as February this year some 14% of our arrears customers would neither contribute to their mortgage nor discuss this issue with us despite our efforts via letter, telephone and in person. That said it has improved significantly from last summer when the figure was 35%.
In these situations, we have no choice but to pursue the legal route. However, the primary intent of this activity remains to encourage meaningful reengagement so we can help the customer. The alternative for most customers is to lose their home, be liable for any shortfall and have to pay more in rent than in their mortgage repayment. Any customers can take themselves out of the legal process at any stage by meaningfully reengaging. Almost half our our customers in the legal process have reengaged with us.
Ulster Bank Chief Risk Officer, Stephen Bell said:
“Ulster Bank’s primary objective has always been to help our customers come to a fair, affordable solution which allows them to remain in their homes and the communities which they have chosen. It is vital that our approach is fair for all customers – both those maintaining their mortgages and those who are in difficulty.
“The numbers of customers in arrears of 90 days or more has decreased month on month for the past year. In 2013 we decreased our arrears book by almost €1bn and we have helped 2,500 customers out of arrears of 90 days plus. These figures demonstrate that our approach is working.
“Our customers who are engaging recognise that there is a cost to living in a home but we will continue to see legal activity where the customer still does not engage or make any payment. However any customer can take themselves out of this process at any time by engaging and restablishing a formal payment habit. We encourage any customer in financial difficulty to engage with us as early as possible so that we can work together to find the right solution.”
