Significant rise in early arrears over last 6 months

Brendan Burgess

Brendan Burgess

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The Central Bank issued their arrears report for December 2022 last week.

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I would be very concerned that the arrears up to 90 days has increased quite significantly.

This presumably is due to the increase in interest rates and increases in the cost of living generally.


Brendan
 

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Just wondering: if a borrower is in arrears of one payment for a continuous period of over a year, does that get recorded as up to 90 days OR 1 - 2 years. In other words, is it the period of arrears, or the arrears divided by the monthly payment that's counted?
 
Also these are only mortgage arrears. It would be interesting to see the figures for arrears on different types of debt as well such as credit cards, personal loans, business loans, car loans etc.
 
Right Winger said:
Just wondering: if a borrower is in arrears of one payment for a continuous period of over a year, does that get recorded as up to 90 days OR 1 - 2 years. In other words, is it the period of arrears, or the arrears divided by the monthly payment that's counted?
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It is the outstanding arrears balance.

You can miss two months and return to the original principal+interest repayment and you will stay in the <90 days bucket forever unless you clear the accrued arrears.
 
So (slow learner here) there are 5526 people who are in arrears of 120 monthly payments or more. Wow!
Presumably that doesn't include people who have agreed alternative solutions involving restructuring, writedowns, PIAs, etc?
 
Right Winger said:
So (slow learner here) there are 5526 people who are in arrears of 120 monthly payments or more. Wow!
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Correct. It is not someone who went into a bit of arrears ten years ago and haven't caught up since. It is someone who has paid nothing at all for 10 years or someone who has paid half their monthly repayment every year for 20 years.

Brendan
 
Right Winger said:
Presumably that doesn't include people who have agreed alternative solutions involving restructuring, writedowns, PIAs, etc?
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When a mortgage is restructured, the usual practice is for the lender to wait for 6 months to a year to capitalise the arrears.

So if people are complying with the restructure , they are out of the arrears figures.

However, some people have not complied with their side of the agreement, so they are still in the arrears figures.
Brendan
 
Brendan Burgess said:
The Central Bank issued their arrears report for December 2022 last week.

View attachment 7404

I would be very concerned that the arrears up to 90 days has increased quite significantly.

This presumably is due to the increase in interest rates and increases in the cost of living generally.


Brendan
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I expect the end of year figures to be worse once the Start and Pepper rate rises figure in the stats.
 
More like people of a certain age have been able to switch to the likes of Spry to get out from under the Vultures grip.
There is still a lot of very bad debt in these figures that will never be sorted .
The Celtic Tiger legacy has not been wiped out yet , however the new mortgage rules should prevent this from taking place again .
However the Vultures are not giving any real relief in terms of interest rate reductions , if they did these figures would fall much faster .
 
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