Central Bank sets new, tougher mortgage resolution targets
Lenders have until next June to find solutions for 75% of customers more than 90 days in arrears
The Central Bank has given the country’s main lenders until next June to put in place mortgage debt solutions for 75 per cent of customers more than 90 days in arrears.
The new targets, agreed in conjunction with the EU-IMF troika, also stipulate the number level of “concluded solutions” on the banks’ books must reach 35 per cent by the same date.
There are just under 100,000 Irish mortgage accounts more than 90 days behind in their repayments.
The State’s six main mortgage lenders - AIB, Bank of Ireland, Permanent TSB, Ulster Bank, ACC Bank and KBC Bank - now have until the middle of next year to put debt arrangements in place for 75,000 of them.
The banks can write down debt, reschedule the loan, put a new payment plan such as a split mortgage in place or repossess the home.
“In line with the EU-IMF programme, the Central Bank has now set its expectations for the banks for end-June 2014 and requires sustainable solutions offered to customers to reach 75 per cent of over 90-day arrears and for concluded solutions to reach 35 per cent by that date,” the bank said in a statement.
Last month, the Central Bank said the banks had met their targets for providing solutions for 30 per cent of mortgages in arrears of more than 90 days by the end of September.
However, it raised several concerns about the sustainability of some solutions being offered to customers in mortgage distress.
Specifically, it highlighted that short-term loan modifications were being proposed in some cases where there was no tangible evidence of a borrower’s circumstances improving, or clarity on the ultimate long-term solution.
It also identified resolution proposals where there was “an absence of requisite information”, such as verification of borrower income or property value.