Ulster Bank meets target for mortgage arrears resolution
ULSTER Bank says it has met the Central Bank's first target for mortgage arrears resolution, though the situation at the country's other biggest lenders is not yet clear.
The first target required the country's biggest banks to propose arrears resolution plans to one fifth of the 142,000 mortgages currently in arrears by the end of June. A plan can include a proposed repossession or voluntary surrender.
Reports over the weekend suggest that not all banks will have satisfied the target, since a row has reportedly erupted between the Central Bank and some lenders over what should be offered to distressed mortgage holders. Split mortgages are thought to be one of the biggest sticking points.
Central Bank Governor Patrick Honohan said in late March that split mortgages could provide sustainable solutions for "significant numbers".
But only 144 split mortgage arrangements were put in place in the first three months of the year.
In a split mortgage situation, part of the full cost of a mortgage is temporarily shelved. For a period payments are only due on the outstanding balance. Banks are thought to be wary of split mortgages since the shelved part of the mortgage is more likely to have to be written-off.
The Central Bank's next targets for mortgage resolution proposals are set for September and December. By the end of 2013, lenders must have proposed a resolution scheme to half of all of those in arrears.
The targets apply to ACC Bank, AIB, Bank of Ireland, KBC Bank, Permanent TSB and Ulster Bank.