“Carefully targeted debt relief” to become more available to mortgage holders

“Carefully targeted debt relief” will become a feature of how banks deal with mortgage holders in severe difficulty with mortgage repayments. This is according to the Central Bank deputy governor Matthew Elderfield.

Mr. Elderfield also acknowledged the harsh reality accompanying debt relief – it will be made available in tandem with property repossession, which Mr. Elderfield expects will “rise significantly”.

“For customers the key message is one of full engagement with their bank, meaning being available for contact, making a full disclosure of your affairs and actively working with the bank to discuss possible solutions.”

Mr Elderfield said banks’ capacity for dealing with arrears was “still short of ideal”, despite improvements over the past 15 months.

“Now is the time to see real delivery. It is important that this involves a more realistic mix of solutions for borrowers.”

There is now a fairly coordinated and consistent message coming from the Central Bank in respect to mortgage arrears, where there appears to be a high degree of alarm at the growth in arrears since 2009.

Arrears by category:

There are 761,954 residential mortgages where 86,146 are in arrears, this equals 11.3% of all mortgages.

Separately, there are 149,952 investment property mortgages. 26,770 of those are in arrears, which equates to 17.9% of the total.

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