Figures for mortgage defaults double

DEFAULTS AMONG Irish mortgage holders more than doubled over the course of last year and were still growing in December, according to the latest analysis from Moody’s.

The ratings agency found that 1.65 per cent of the residential mortgages it studied had not been repaid for 360 days or more in December, up from 1.62 per cent in November. This compared to 0.7 per cent a year earlier, marking growth of almost 140 per cent over the course of 2010.

Moody’s tracks a €40.6 billion pool of residential mortgages that Irish lenders have used to back bonds used to raise funds. The pool contains a portion of mortgages issued by AIB, Bank of Scotland (Ireland), Bank of Ireland/ICS, EBS, First Active, Irish Life Permanent, KBC and Ulster Bank.

Within this group, the highest proportion of full residential defaults in December was recorded by First Active, with 3.11 per cent, almost double the 1.6 per cent it registered at the end of 2009.

EBS had the next biggest default rate of 2.24 per cent, up from 1 per cent, while Irish Life Permanent had the biggest growth in defaults over the year. The lender saw its rate of defaults almost triple to 1.44 per cent.

AIB was found to have the lowest default rate of 0.41 per cent in December but Moody’s did not provide comparisons with previous periods for the lender.

The figures also show sharp annual growth in mortgages where repayments had not been made for 90 days or more. This category accounted for 5.74 per cent of the pool in December, up from 5.68 per cent in November and from 3.24 per cent a year earlier.

First Active was again the lender feeling most pressure here, with a tenth of its residential loans under analysis falling under the 90-day-plus “delinquency” category. This was about steady on the previous month but marked a doubling of its 90-day delinquency rate a year earlier.

EBS had a 6.68 per cent 90-day delinquency rate, with KBC just behind at 6.52 per cent.

The overall balance of loans under analysis by Moody’s fell back by 5.9 per cent to €40.6 billion in the year to December. The biggest individual decrease in individual portfolios was recorded by First Active, where mortgages under analysis fell by 12.2 per cent to just shy of €3.5 billion.

Moody’s has placed its ratings on all Irish residential mortgage-backed securities on review for possible downgrade. This review, which stems from mass downgrades of other Irish bank debt, is likely to be completed within a fortnight, the agency said yesterday.

In an earlier analysis, Moody’s found that the average Irish mortgage defaulter is likely to be a self-employed person who borrowed at the peak of the boom in 2006 or 2007 and does not live in Dublin or Cork.