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Mortgage Repayments after Permanent Modification

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  • McGuinness, Anne

    (Central Bank of Ireland)

Abstract

This Economic Letter analyses the performance of permanently modified mortgage loans, of which there were some 38,086 in the domestic Irish banks at end-2013. For modified loans with prior default history (18,740), 55 per cent met the modified repayment amount at end-2013, up from 28 per cent in 2011. The proportion of default borrowers meeting modified repayments after three and twelve months is converging, at 68 and 60 per cent, respectively for modifications issued in 2013q4. This could be due to better loan modification strategies or the improving economic backdrop. Positive trends are welcomed, however more work is needed to address the large number of loans still in default but which have not been modified (28,585 in the Irish domestic banks as at end-2013), and the high proportion of partial (29 per cent) and non-paying (11 per cent) modified loans.

Suggested Citation

  • McGuinness, Anne, 2014. "Mortgage Repayments after Permanent Modification," Economic Letters 07/EL/14, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:07/el/14
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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter---vol-2014-no-7.pdf?sfvrsn=10
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    References listed on IDEAS

    as
    1. Kennedy, Gerard & McIndoe-Calder, Tara, 2012. "The Irish Mortgage Market: Stylised Facts, Negative Equity and Arrears," Quarterly Bulletin Articles, Central Bank of Ireland, pages 85-108, February.
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    Cited by:

    1. McCann, Fergal, 2017. "Resolving a Non-Performing Loan crisis: The ongoing case of the Irish mortgage market," Research Technical Papers 10/RT/17, Central Bank of Ireland.
    2. Lydon, Reamonn & McIndoe-Calder, Tara, 2017. "The Great Irish (De)Leveraging 2005-14," Research Technical Papers 05/RT/17, Central Bank of Ireland.
    3. Danne, Christian & McGuinness, Anne, 2016. "Mortgage modifications and loan performance," Research Technical Papers 05/RT/16, Central Bank of Ireland.

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