Ulster Bank head claims people not paying mortgage arrears on purpose

The Chief Executive of Ulster Bank in Ireland has said there is evidence that some Irish people are deliberately not paying their mortgages.

Jim Brown said there is usually a link between mortgage arrears and unemployment levels.

He said this has remained the case in the North, where there has never been any discussion of possible debt forgiveness.

However, Mr Brown said the same link in the Republic broke down two years ago.

He said: "In the Republic, the correlation between mortgage arrears and unemployment started to break down in Q2, 2011, and there is now no correlation between them.

"It appears, therefore, that there has been a breakdown in the payment discipline for some mortgage customers."

Ulster Bank executive Stephen Bell revealed that the bank had issued more than 4,000 legal letters to mortgage customers in a three-month period earlier this year.

Bank executives have told the Oireachtas Finance Committee that they've sent letters to customers who have fallen behind on payments, and made no effort to engage with the bank.

Mr Bell said people have had no incentive to engage with banks because of a High Court ruling forbidding some homes from being repossessed.

He also said the Central Bank's code of conduct on mortgage arrears means banks have not been able to contact some lenders who simply won't make their repayments.