Mixed reaction for Central Bank 90-day arrears benchmarks

The new benchmarks set by the Central Bank as part of the mortgage arrears resolution targets mean that fewer than 30% of mortgage holders will have to have a sustainable solution in order for the banks to meet the targets.

The targets announced by the Central Bank are that of the 79,000 people in 90 days arrears, 85% must be offered sustainable solutions, the target for acceptance is then 45% of those.

It is then hoped that 75% of those accepted offers will prove to be sustainable.

Irish Mortgage Brokers’ Karl Deeter said that the Central Bank was allowing for a very high level of attrition between offer and acceptance for what are supposed to be sustainable solutions.

“There will be a significant attrition between offer, acceptance and solution.

“If they are supposed to be long-term sustainable solutions, why are only 755 supposed to be performing at the end of the year. They are either adopting a very laissez-faire attitude or they are expecting a high level of recidivism from borrowers,” he said.

The most recent figures from the Department of Finance showed that mortgages in arrears ofover 90 days were continuing to rise.

The figures released last month showed that there had been no improvement in the percentage of mortgages restructured between December and March.

In total, some 74% of mortgages in arrears of more than 90 days had not been restructured.

Ratings agency Fitch has forecast that the mortgage arrears crisis will continue to grow as the buy-to-let sector fuels defaults and depresses prices outside of Dublin.

In a research note, the agency said it was expecting to see more robust action from the banks since the removal of the protection of the Justice Dunne ruling which had prohibited banks from foreclosing on properties.