Mortgage Arrears October 2012 Trokia Final · Mortgage Arrears Programme oversight Programme Oversight Project Coordination Steering Group, chaired by the Department of Finance, and

Mortgage Arrears

October 2012

Mortgage Arrears Programme oversight

Programme Oversight Project Coordination

� Steering Group, chaired by the

Department of Finance, and

comprising senior representation

from the other relevant

Departments and the Central Bank,

established at end 2011 to drive and

oversee the implementation of the

recommendations of the “Keane

Report”

� More recently, a temporary

Government committee, chaired by

An Taoiseach and including all

relevant Ministers established to

oversee the project at a political

level.

� Several Project Working Groups have been

established to ensure focus and delivery

which report to the Steering Committee.

� Specialist expertise – legal, banking, policy

analyst and project planning – has also

been assigned to the Department of

Finance to assist this group and also to

assist the relevant Departments progress

the items that fall within their remit.

2

3

The Mortgage Arrears Picture *

The latest mortgage arrears data was published by the Central Bank on 23

August 2012 and refers to the quarter ending June 2012.

Overview

� At the end of June 2012, there were 761,533 private residential mortgage

accounts for principal dwellings to a value of €112 billion.

� While the total number of accounts in arrears of greater than 90 days

continues to increase (83,251 at end Q2 v 77,630 at end Q1), there has been a

decline in the number of accounts going into and at the early stage of arrears -

for example, for accounts in arrears for less than 90 days, which is the new data

set published by the Bank, the number of such accounts in arrears has fallen by

2.4% when compared to Q1 2012.

� In addition, the numbers of accounts that were 91 -180 days in arrears have

also fallen by 3.5% at the end of Q1 figure.

* Source: “Residential Mortgage Arrears and Repossessions Statistics: Q3 2012” Central Bank of Ireland

4


Arrears

� At the end of June 2012, there were 761,533 private residential mortgage

accounts for principal dwellings to a value of €112 billion.

� At the end of June 83,251 or 10.9 per cent of accounts were in arrears of

more than 90 days; this compares with 77,630 accounts or 10.2 per cent for Q1.

(In terms of mortgage balances, the comparable figures are 14.7% and 13.7%

respectively)

� There are 65,698 accounts in arrears of more than 180 days, or 8.6% of total

stock at the end of Q2, compared to 59,437 accounts of 7.8% at the end of

March 2012.

� 45,165 accounts are in arrears of less than 90 days compared to 46,285

accounts at the end of March, a fall of 2.4 per cent, i.e. the new data set.


5

Residential Mortgage Arrears – still challenging

Total Irish Residential Mortgage Arrears – source: CBI

6.37.2

8.19.2

10.210.9

8.39.4

10.812.3

13.714.7

3.3 3.6 4.1 4.6 5.1 5.7

7.46.6

5.95.2

4.54.1

0

2

4

6

8

10

12

14

16

Sept

09

Dec

09

Mar 10 June

10

Sept

10

Dec

10

Mar 11 June

11

Sept

11

Dec

11

Mar 12 Jun-12

Arr

ea

rs (

%)

90+ day arrears (by number) 90+ day arrears (by balance)

1.1 1.2 1.3 1.5 1.6 1.7 1.8 2.0 2.2 2.3 2.4 2.3

2.42.8

3.13.6

4.04.5

5.26.0

6.97.8

8.6

2.2

0

2

4

6

8

10

12

Sept

09

Dec

09

Mar 10 June

10

Sept

10

Dec

10

Mar 11 June

11

Sept

11

Dec

11

Mar 12 Jun-12

Arr

ears

(%

)

90-180 day arrears (%) 180+ day arrears (%)

• € 16.5bn of residential arrears >90 days, of which €13.4bn is in

arrears of >180 days

• < 90 day: 45,165 accounts are in arrears of less than 90 days

compared to 46,285 accounts at the end of March, a fall of 2.4 per

cent

• 90-180 Days: 83,251 or 10.9% of accounts were in arrears >90

Days; this compares with 77,630 accounts or 10.2 per cent for Q1

• >180 Days: 65,698 accounts in arrears of more than 180 days, or

8.6% of total stock at the end of Q2, compared to 59,437accounts

of 7.8% at the end of March 2012


6


Restructuring

• At the end of June 2012, a total

stock of 84,941 principal dwelling

mortgage accounts were

categorised as restructured,

reflecting an increase of 6.6 per

cent from the stock of 79,712

restructured accounts at the end of

Q1.

• Of the restructured accounts,

40,221 accounts are not in arrears.

• Over 35 per cent of the

restructured accounts are on

interest only arrangements while

around 4 per cent are on a payment

moratorium.


Restructure Type June 2012

Arrears

Capitalisation

12%

Interest Only, 35%

Reduced Payment

(> interest only),

18%

Reduced Payment

(< interest only),

14%

Term Extension,

12%

Other, 0%

Payment

Moratorium, 4%

Hybrid, 5%

Deferred Interest

Scheme, 0%

Interest Only Reduced Payment (> interest only)

Reduced Payment (< interest only) Term Extension

Arrears Capitalisation Payment Moratorium

Hybrid Deferred Interest Scheme

Other

7


Repossessions

• Legal proceedings were issued to enforce debt/security on a mortgage in 345

cases which is up on the figure of 278 in Q1 and only 95 in the final quarter of

2011. (This increase is taking place even though the banks are expressing

concerns about the Dunne judgement case and their ability to repossess

properties).

• Court proceeding concluded in 193 cases during Q2 with the Courts granting

repossession orders for 97 of these cases.

• A total of 146 properties were taken into possession by lenders during the

quarter, of which 102 were voluntarily surrendered/abandoned and 44

repossessed on foot of a Court Order.

• 142 properties were disposed of by the lenders during the quarter, resulting in

961 properties in their possession at end June 2012.


8

Mortgage to Rent Scheme –D/ECLG led

Progress to date

• Pilot with AIB and Start Mortgages

• Pilot cases progressed with majority of lenders totalling 93 cases

• 28th June 2012: MtR Scheme formally launched by DECLG

• All systems and processes in place including Online Tracking System for

Stakeholders

• 492 cases put forward by lenders, 202 cases being progressed through the

Housing Agency

•12 Approved Housing Bodies involved in the scheme

• Roundtable with IBF/IMC members to review MtR Model

Next Steps

• Facilitate the full rollout of the Mortgage to rent initiative with the Housing

Agency acting as co-ordinator for the scheme

• Engage with individual banks in advance of roll-out of long-term forebearance.

9

Personal Insolvency Bill – D/Justice led (D/F)

• December 2010: LRC report;

• 27 October 2011: D/Justice draft Heads and memorandum to Govt (secured debt

not included)

• December 2011: Development of PIA proposal and consultation with key

stakeholders (D/Justice, CBI, IBF, Troika)

• December 2011: Strategy on Personal Insolvency reform to meet Troika

benchmark;

• Christmas 2011/Jan 2012: Heads drafted for consideration by Government;

• 24/25 January 2012: Govt approval of Heads and joint press conference by Mins

Shatter and Noonan;

• 25 January 2012 -1 March 2012: official consultation period (40+ submissions);

Progress to date

10

• 15 February 2012: Oireachtas Committee hearings;

•Oireachtas Committee reported 6th March 2012;

• April 2012: Troika quarterly visit and update;

• April 2012: decision to postpone publication of Bill until end-June 2012 with

intention to commence second stage in the Dáil prior to the Summer recess to

facilitate early passage of the legislation through the Oireachtas in the Autumn

session;

• 27 May 2012: Advertisement for Director Designate of Insolvency Service;

• 29 June 2012: Bill published following Cabinet Approval

• 05 July 2012: Bill progressed through second stage in advance of summer recess

•14 September 2012: Bill passed through Committee Stage

Progress to date

Personal Insolvency Bill – D/Justice led (D/F) contd.

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Next Steps

• Appoint the Director Designate (22 October)

•Bill expected to pass Report Stage in November

•Advance the organisational planning for the new Insolvency Service

•Personal Insolvency Bill enacted – Year End

•Establish Personal Insolvency Service and bring into operation (Q1 13)

Personal Insolvency Bill – D/Justice led (D/F) contd.

12

Engagement with the Banks – CBI led

Mortgage Arrears Resolution Strategies (MARS)

Progress to date

• 21st October 2011: - Central Bank requested the mortgage lenders to submit

strategies by end November.

• End November: Banks issue MARS to Central Bank

• 28th February 2012: Deputy Governor met 7 main lenders on to discuss common

themes.

• Mid February 2012: Central Bank has issued feedback to each MARS strategies

submitted by the banks with specific targets

• April 2012: CBI has reviewed the operational capacity of the 3 Covered Banks to

effectively manage their arrears BRS on FMP banks

• 27th April 2012: Revised CCMA guidance issued on customer contact

• May 2012: FMP Banks have reverted with revised operating models and CBI

review completed.

13

Engagement with the Banks – CBI led

Mortgage Arrears Resolution Strategies (MARS) contd.

Progress to date

• May 2012: The Central Bank provided feedback directly to the Boards of AIB, BOI

and PTSB.

• 31st May 2012: All lenders were required to submit board approved loan

modification and resolution options, and a segmentation of their mortgage

portfolio by end May (last submission received and currently under review);

• 18th June 2012: The Central Bank has reviewed the banks board approved

submissions and has reverted with feedback in the week commencing 18 June

• Q3 2012: Pilots (Operational Capability) by Banks, with Central Bank oversight, of

a range of solutions to deal with genuinely distressed mortgage holders;

Engagement with the Banks – CBI led contd.

14

Engagement with the Banks – CBI led contd.

Mortgage Arrears Resolution Strategies (MARS) contd.

Progress to date

• Q3 2012: CBI defined KPIs (PDH & BTL) � Mortgage Arrears = stock and quarterly change – already a key indicator;

demonstrates underlying trend

� Early Arrears = 0 – 90 days – ability to deal with new cases; is the problem getting

worse

� Stock of Arrangements = short term and long-term (by product)– demonstrates if

lenders are moving from forbearance to modification

� New arrangements in Period = short term and long-term – throughput of cases and

ability to identify arrears where no action has been taken

� Redefaults = demonstrates whether arrangements are the appropriate option (Q1

2013)

Next Steps

• Q4 2012: Commence full roll-out by Banks, with Central Bank oversight, of a range

of solutions to deal with genuinely distressed mortgage holders.

15

Mortgage Advisory Services - D/SP Led

Progress to date

• Department of Social Protection is chairing the Working Group consisting of

Departments of Finance, Public Expenditure, Justice, the Central Bank, the Citizens

Information Board, and the NCA, to examine all issues relating to the

establishment of the Mortgage Advice Service;

• Group has considered what, if any, is the deficit/gap that an independent

mortgage advice service could/should address; Consideration was being given as

to how services will be accessed, the information requirements, the role of the

lenders and the proposed role of the Personal Insolvency Practitioners in this area;

16

Mortgage Advisory Services - D/SP Led contd.

Approach Taken (formal launch by M/SP early September)

• Phase 1: Website: www.keepingyourhome.ie - launched end May 2012

• Phase 2: General Mortgage Arrears Information Helpdesk hosted by CIB -

launched end July 2012

• Phase 3: Independent Advice Service to Borrowers availing of Long-Term

Forbearance - Operational at end September 2012. Some 2,500 practicing

accountants are available to provide the service and are available on a county by

county basis on www.keepingyourhome.ie.

Mortgage Advisory Services - D/SP Led contd.

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Documents

Mortgage Arrears October 2012 Trokia Final · Mortgage Arrears Programme oversight Programme Oversight Project Coordination Steering Group, chaired by the Department of Finance, and