Definition of non-performing loan

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Ger1966

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This may be a stupid question - similar to the "I don't know what a tracker mortgage is" advert - but what is the definition of a non-performing loan?

The reason for my question is that I think I read somewhere that the Central Bank defines any mortgages that have been re-structured, irrespective of whether or not the new terms are being adhered to, as non-performing. Is this the case?

I have BTL mortgages with BoI which were initially interest only. The interest-only period came to an end in mid-2014 and the rental income wasn't sufficient to cover full capital and interest repayments so I worked with the bank and they gave me a split mortgage which was to be reviewed after 3 years. This was reviewed this time last year so I'm now on full capital and interest repayments but the term of the mortgages have been extended. I have never missed any payments while on interest-only, split payments and full repayment mortgages. Would my BTL mortgages with BoI be considered non-performing and could be sold on to vulture funds if BoI were to sell on BTL loans in the future?
 
Ger1966 said:
The reason for my question is that I think I read somewhere that the Central Bank defines any mortgages that have been re-structured, irrespective of whether or not the new terms are being adhered to, as non-performing. Is this the case?
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Not exactly. This isn't my area, so I don't have a full grasp of all the rules.

It's extremely complex, but on the face of it, as you were not non-performing prior to restructure, but restructure was necessary, it would be treated as 'performing foreborne'. So initially it would be non-performing, but so long as you adhered to that agreement it would be treated as performing again after 2 years (so long as it's not otherwise non-performing).

We attempted to explore it in the following thread, although a different context, and Brendan pulled a graph from the ECB rules:
https://www.askaboutmoney.com/threads/details-of-ptsb-sale-of-mortgages.207713
 
Thanks Red!

As the mortgage term was extended, and also the repayment type (full capital and interest payments) changed this time last year, was the 'performing foreborne' "clock" reset to 0 then? Am I still 1 year away from being performing - assuming that I make all repayments between now and then?
 
Hi Ger,

The specifics are beyond my knowledge, and too important to just make up an answer for you, but if I were to hazard a guess I'd say yes, you've 12 months left.
 
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