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Eighth Review Under the Extended Arrangement—Further Supplementary Information

Author(s):
International Monetary Fund. European Dept.
Published Date:
December 2012
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1. This supplement provides an update on data on residential mortgage arrears and repossessions released since the issuance of a supplement to the staff report on December 12, 2012 (EBS/12/157, Supplement 1). The Central Bank of Ireland published these statistics for the third quarter on December 13, with an expanded release covering buy-to-let (BTL) properties in addition to principal dwelling houses (PDH). Some data for previous quarters included in the staff report (EBS/12/157, page 6) are revised.

2. Household mortgage arrears data show a continuing increase in mortgage delinquency, although early arrears appear to be stabilizing. The value of residential mortgages in arrears for over 90 days rose in the third quarter to 15.1 percent of total mortgage loans, up from 14.1 at end-June. Early arrears cases (less than 90 days in arrears), once corrected for the impact of technical factors, declined as seen in the previous two quarters. Repossessions and voluntary surrenders continued at about 150 per quarter, similar to the pace in 2011.

A fall in the share of restructured mortgages is largely a reclassification effect, and about half of restructures are payments of interest only or reduced payments that are smaller than interest only.

3. Residential mortgage accounts for BTL properties show greater impairment. Mortgages in arrears of more than 90 days accounted for 25.5 percent of total BTL mortgage loans by end September, up from 23.9 percent at end June. The higher rate of arrears on BTL mortgages compared with PDH mortgages is reflected in the significantly higher loss rates on BTL mortgages allowed for in the 2011 bank recapitalization exercise (Prudential Capital Assessment Review 2011, page 21).

Ireland: Residential Mortgage Arrears (Billions of euros) 1/
Dec-09Dec-10Dec-11Mar-12Jun-12Sep-12
Outstanding118.3116.7113.5112.7112.0111.2
Mortgage loans in arrears over 90 days 2/5.38.613.715.015.8 4/16.8
in percent of outstanding4.57.412.013.314.1 4/15.1
Restructured mortgagesn.a.10.413.314.215.113.9
in percent of outstandingn.a.8.911.712.613.512.5
Repossessions and voluntary surrenders 3/2115741,1821,3521,4981,652
Source: Central Bank of Ireland.

Private residential mortgage accounts for principal dwellings held in Ireland.

Includes restructured mortgages in arrears over 90 days.

Cumulative number since 2009Q3.

Revised as of December 2012.

Source: Central Bank of Ireland.

Private residential mortgage accounts for principal dwellings held in Ireland.

Includes restructured mortgages in arrears over 90 days.

Cumulative number since 2009Q3.

Revised as of December 2012.

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