Saturday 20 December 2014

Accounts show 70pc of Start's loan book now 'in trouble'

Peter Flanagan and Donal O'Donovan

Published 12/01/2013 | 05:00

AS much as 70pc of Start mortgages are in trouble, according to new accounts for part of the business.

Accounts just filed for Lansdowne Mortgage Securities No2 – one of the companies that the subprime lender used to finance its aggressive push into the Irish market – show that €107.8m of the company's loan book is at least one month past due but not classed as "impaired". Some €57.5m, or about 23pc of the company's book, is more than a year past due.

Taking into account the €63.6m worth of loans that the company classes as "impaired", more than 70pc of the firm's €242.7m loan book is in trouble of some description.

At the height of the boom, Start Mortgages bundled up hundreds of millions of Irish home loans and sold the debt on to investors in the bond markets. It is now seen as the lender most likely to repossess homes over unpaid debts. Start Mortgages has become a frequent visitor to the courts.

The lender was behind one in three of the 124 repossession orders handed down by the High Court in the first half of 2012, according to figures from the courts service.

Nine lenders, including big players AIB and Bank of Ireland, were responsible for the other two-thirds of cases.

Start was one of the more aggressive lenders in Ireland during the property bubble, often making home loans when Irish banks were unwilling to lend.

The loans came at the cost of higher interest rates than traditional lenders charge.

Lansdowne Number 2 was incorporated in November 2006, right at the peak of the boom.

For the year to the end of March 2012, the company saw losses more than double to €4.8m, driven by an increase in loan impairments from €8.1m in 2011 to €11.5m.

Irish Independent

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