25% of repossessions are subprime

Subprime lenders only account for 3% of mortgage lending but they have been responsible for up to a quarter of all home repossessions, according to figures released by the Central Bank.

Figures furnished to Fianna Fáil finance spokesperson, Micheal McGrath, show that up to one in four repossessions was carried out by a subprime lender.

The figures show that from the beginning of 2012 to the end of the third quarter of 2013 some 380 houses were repossessed. Subprime loans were involved in 93 of these cases.

“These figures show that over the period from the beginning of 2012 to the end of September 2013 a quarter of all family home repossessions relate to subprime mortgages,” Mr McGrath said.

“While subprime mortgages are by their nature likely to be more risky, it should not be the case that one in four repossessions are subprime.

“The really concerning aspect is that the recent decisions taken by government which make it easier for homes to be repossessed are likely to result in far more subprime mortgages being called in by the lender,” Mr McGrath said.

The biggest players in the sector were Start Mortgages part of GE, Stepstone — a joint venture between Lehman Brothers and KBC — Nua Mortgages, part of Investec, and Springboard, which was a joint venture with Permanent TSB and Merrill Lynch.

While the main Irish banks are bound by the mortgage arrears resolution targets which require the banks to have offered sustainable solutions to 75% of borrowers by June 2014, subprime lenders are not.

This means that there is no government pressure forcing these lenders to arrange sustainable resolutions that keep the mortgage holders in their homes.

Mr McGrath said that some mortgage holders could still be in their homes if the mortgage arrears resolution targets process applied to subprime lenders.

“It is highly regrettable that the mortgage arrears targets programme does not apply to subprime mortgages as this might have resulted in at least some of the mortgages in difficulty being rescued,” he said.

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