Mortgage arrears - the calm before another storm?

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Mortgage arrears have gradually slipped from public and media focus as the years have passed, but the problem hasn't gone away

There was a time in the last decade when the Central Bank's mortgage arrears figures were as keenly anticipated as the property price figures from the Central Statistics Office.

Understandably, there was quite a bit of interest in them in the context of the pandemic, but perhaps surprisingly there was no marked deterioration in the numbers.Which begs the question, have mortgage holders been spared the worst excesses of the pandemic, or are we in a calm before another arrears storm?At the end of last year, there were just under 732,000 mortgages on primary residential properties here to the value of €98 billion.

The payment breaks - which came into effect in the early stages of the pandemic - were offered for a period of up to 6 months. That finding was largely reflected by the ratings agency Fitch in a review of the banks here this week. "However, we expect asset quality deterioration to be much less severe than in the aftermath of the 2008 financial crisis," the agency added.

Are the banks expecting the financial fallout to be worse here than across Europe? Or are they simply being conservative, and expect to be able to claw back a lot of those provisions when this period has passed? Ms McGovern said mortgage holders in Ireland were 'paying dearly' for a failure to successfully deal with mortgage arrears 'that have been allowed to drag on'.

That difficulty was also referred to by the Governor of the Central Bank in a blog published just before Christmas.

 

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