100,000 mortgages adjusted
The scale of mortgage adjustments in the Irish market since the financial crash has been larger than previously measured with the terms of almost 100,000 loans altered, new research from the Central Bank shows.
Research on bad loans and the State’s mortgage market by Fergal McCann of the regulator’s financial stability division examined five banks and found that close to 100,000 adjustments were issued between 2009 and 2016.
Nine out of 10 loans that defaulted between 2009 and 2016 and had exited default by the end of 2016 did so following an adjustment to their loan.
There was a rapid switch from adjustments of a short-term nature to those of a more long-term, sustainable nature after 2013. Mr McCann said this was “important” considering that permanent adjustments were associated with higher repayment probabilities than adjustments of a temporary nature.
On tracker mortgages, more than 260,000 are vulnerable to potential ECB interest rate rises.
The research shows that 61 per cent of borrowers in deep arrears had engaged with their lender by the end of 2016. This figure rose to more than 70 per cent for those with arrears of less than 720 days.