Arrears of 90 days or more on residential mortgages doubles

The level of residential mortgages in arrears of 90 days or longer more than doubled in the year to October 2009 across €40.4 billion of Irish loans sold on to investors in bonds, according to credit rating agency Moody’s.

A report by the agency on the Irish prime residential mortgage-backed securities (RMBS) market found that arrears of 90 days or longer jumped to 2.9 per cent in October from 1.34 per cent a year earlier across the loans portfolio. Redemptions on the mortgages totalled 6.4 per cent in October – half the level of a year earlier – and a decline from an all-time high of 25.3 per cent five years ago.

There is a risk the current delayed foreclosure process where lenders are supporting borrowers in default would lead to higher losses in Irish RMBS transactions “in the mid-term”, Moody’s said, and that the performance of mortgages “may not yet fully reflect the depth of the current recession”.