Key Post Latest Central Bank Arrears figures

Brendan Burgess

Brendan Burgess

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As of 31 March 2011 per [broken link removed]
|31 March 2010|31 March 2011
Number of mortgages in arrears over 90 days| 21,187|49,602
Number of mortgages restructured and not in arrears|n/a|39,662
Total restructured or in arrears||89,264
Total number of mortgages|791,047|782,429
% in arrears over 90 days|2.7%|6.3%
% in arrears or restructured||11.5%
% paying according to the original agreement|88.5%
Repossession data for all lenders - mainstream and sub-prime
|Q12010|Q2 2010|Q3 2010|Q4 2010|2010 total|Q1 2011
Repossessed on foot of court order|26|20|22|34|102|49
Surrendered or abandoned|65|66|59|72|262|91
Total|||||364|
I am informed by the Irish Banking Federation that 70 houses were repossessed by their members in 2010 on foot of a court order.
If you have a loan from one of the main banks, your chances of having your home repossessed against your will in 2010 was 1 chance in 10,000
 
jonocon said:
very informative. can you see things getting better or worse?
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It's hard to know.

The key factor which affects arrears is unemployment. The level at 14.5% is staying very high, so until that fall, the arrears levels won't fall.

The other factors are
Net salary levels - fell in January due to tax increases.
Interest rate rises - hit too late to affect these figures.
Mortgage holder behaviour - impossible to predict.
 
One thing I find interesting the total arrears are € 827,174,000

So well under 1 billion. A really smaller blip compared the other holes found the banks balance sheets.
 
it does seem like small potatoes when we're looking at a quarter of a trillion overall debt
 
jhegarty said:
One thing I find interesting the total arrears are € 827,174,000

So well under 1 billion. A really smaller blip compared the other holes found the banks balance sheets.
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Yes, and less than 10% of the figure quoted by the 11 economists and other commentators in the Irish Times letter calling for debt forgiveness

[FONT=&quot]Their arrears of €10 billion would compare to total mortgage debt outstanding in the Republic of €115 billion[/FONT]
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it's very difficult to keep abreast with the mis information that is out there, constantly changing.
 
Time said:
This is only the tip of the iceberg. Things will get a lot worse.
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When ?

Because I have been hearing this for 2/3 years now , and we only see a stead decline of 3k/5k accounts going over 90 every quarter.
 
jhegarty said:
One thing I find interesting the total arrears are € 827,174,000

So well under 1 billion. A really smaller blip compared the other holes found the banks balance sheets.
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No arrears over 90 days are about 10 billion. There is no real surprise with the figures. The rising arrears over 90 days simply reflects the feeding through of arrears at the height of the recession. I would like to see figures for arrears for 30 days where I would expect to see some levelling off in new arrears.
 
Let's be absolutely clear as there is a lot of misinformation about this.

Directly from the Central Bank's statistics as of 31 March 2011

|balance|arrears
In arrears 91 -180 days|€2,536 m|€73 m
In arrears 180 + days|€7,035 m|€753 m
Total|€9.6 bn|€826 m
So the value of accounts in arrears is €9.6 billion

The actual arrears over 90 days is €826 million

The government could write out a cheque to the banks for €826 million and all arrears over 90 days would be paid off for all the main banks and the sub-prime lenders. All banks owned by the Irish state and all foreign owned banks.
 
I was wondering how the newspapers would report it

Irish Times headline: [broken link removed]

692 is the stock of repossessed houses unsold by the banks. It represents about two years' total repossessions, around 500 of which were voluntary repossessions or abandoned properties.

I suppose a headline such as "Mainstream banks repossess only 70 family homes in 2010" wouldn't catch the mood of the public.
 
Time said:
This is only the tip of the iceberg. Things will get a lot worse.
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If the economy stays on its current path, things will deteriorate a bit and then get better.

However, if the budget deficit is eliminated immediately through a 30% cut in public sector salaries and increases in taxation, then the arrears situation will get a lot worse.

If the bail-out funds are withdrawn from Ireland, things will get a lot worse.

If the eurozone collapses, things will get a lot worse.
 
Brendan Burgess said:
Let's be absolutely clear as there is a lot of misinformation about this.

Directly from the Central Bank's statistics as of 31 March 2011

|balance|arrears
In arrears 91 -180 days|€2,536 m|€73 m
In arrears 180 + days|€7,035 m|€753 m
Total|€9.6 bn|€826 m
So the value of accounts in arrears is €9.6 billion

The actual arrears over 90 days is €826 million

The government could write out a cheque to the banks for €826 million and all arrears over 90 days would be paid off for all the main banks and the sub-prime lenders. All banks owned by the Irish state and all foreign owned banks.
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You are right Brendan but the balance of €9.6 billion or the number of loans are the important numbers when looking at arrear trends. The actual value of the arrears is less important as you would expect that to keep climbing even when the number of new arrears stop rising. Writing a cheque will clear the arrears but it doesn't mean the mortgages start performing again.
 
the balance of €9.6 billion or the number of loans are the important numbers when looking at arrear trends.
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It depends on why you are looking at these trends.

But the main thing is to get the numbers right. Lucey, Gurdgiev, Deeter et al, were out by a factor of 10! And this was in an article where they were proposing debt forgiveness. There are pros and cons to debt forgiveness, but if you overstate the problem by a factor of 10, you are less likely to arrive at the right answer.

I am not sure that the trends are that relevant to be honest. If the state or the banks or the ECB defaults, the trends will be meaningless.
 
They are not really wrong Brendan. If you propose debt forgiveness, there is no point just writing off exisiting arrears (€826m) and leaving people with large mortgages that they are still not able to pay (€9.6bn). The arrears just start again. Not saying the correct figure is the whole 9.6 billion but it's a lot higher than 826m.

Now excuse me while I go and wash myself for defending Lucey and Gurdgiev!
 
But that assumes the house behind those €10bn are worth exactly €0.

There may be €10bn in loans in trouble but assuming a 40% market fall, all 100% mortgages , all taken out at hight of boom , then there still €6bn of assets backing the loans.
 
jhegarty said:
But that assumes the house behind those €10bn are worth exactly €0.

There may be €10bn in loans in trouble but assuming a 40% market fall, all 100% mortgages , all taken out at hight of boom , then there still €6bn of assets backing the loans.
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Absolutely agree. People always forget the asset side of the equation when discussing possible losses. I am simply saying the commentators aren't wrong when they say €10 billion worth of mortgages are in arrears.

Actually, I just looked at the letter than Brendan is refering to and it is badly written. I don't even get the point they are making.
 
Sunny

Their arrears of €10 billion would compare to total mortgage debt outstanding in the Republic of €115 billion
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It's not just badly written. They are simply wrong. The arrears were never €10billion.

It's like Morgan Kelly talking about €250 billion in government debt. His numbers are wrong by a large margin. And the danger is that we might make policy based on wrong numbers.
 
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