Half of bank customers in arrears face legal action

Almost half of Ulster Bank mortgage customers in long-term arrears are in the process of having their homes repossessed, an Oireachtas committee has heard.

Over 6,500 customers out of 14,000 in arrears of at least 90 days are either being processed through the courts or “heading in that direction,” the Joint Committee on Finance, Public Expenditure and Reform was told yesterday.

Oireachtas members were also told that Ulster Bank will not engage in mortgage debt write-downs.

Addressing the committee, Ulster Bank CEO Jim Brown described the size of the bank’s mortgage arrears problem as considerable.

“There is a significant group of customers who have not paid anything for one or two years and who have not engaged with us, so we have to go down the court process,” he said. “Almost 50% of mortgage arrears cases are well advanced down the legal route.”

However, Ulster Bank expects arrears will decline over time, Mr Brown said.

The bank’s chief risk officer, Stephen Bell, said the company had no interest in going down the repossession route but felt compelled to do so in the case of those customers who had refused all meaningful effort at communication.

He added there had been a significant shift recently in providing long-term solutions to those in mortgage distress. “There remains the problem of those not engaging with us at all, despite letters and representatives calling to their homes, but that number is now down to 14%, when it was 30%.”

Mr Bell lamented the long, legal process surrounding repossession in Ireland and said that some cases took two years to go through the courts.

“Very few cases have reached a formal hearing. The first hearing is almost always adjourned, and often the second hearing. We are now waiting for a third hearing in most cases.”

Fianna Fáil TD Michael McGrath described the bank’s approach to mortgage arrears as very tough, and one that would send shivers down the spines of many people.

Mr Brown said the bank’s process to deal with mortgage arrears was working and, where customers engage with it, solutions can be put in place. “However, around 4,000 people have not engaged with us at all and, so we instigated the legal process. It is not our intention to repossess 4,000 homes but to put solutions in place.”

Earlier Mr Brown said Ulster Bank, unlike some other banks, does not engage in mortgage write-offs but offered other solutions to distressed customers. “We not offer debt write-offs. We do not believe they are appropriate and they can, in fact, be a distraction.”

Ulster Bank offered supportive and affordable solutions to distressed mortgages, he said.

The committee heard last year Ulster Bank repossessed 136 homes, up from 84 in 2012. Of that, 93 were voluntary repossessions.

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