Some lenders not covered by Central Bank loan targets
Borrowers could miss out on debt relief deals
Tens of thousands of Irish homeowners who are struggling to repay their mortgages could find it hard to get a deal to ease their mortgage pain because their lenders are not covered by the targets set by the Central Bank for those in mortgage distress.
Under these targets, banks must offer long-term deals to one in five of those struggling to repay their mortgages so that it is easier for the borrower to manage their repayments.
However, local authorities, Danske Bank and the former Irish Nationwide Building Society (INBS) – which is now part of the Irish Bank Resolution Corporation (IBRC) – are not covered by the Central Bank targets.
Only ACC Bank, AIB, Bank of Ireland, KBC Bank, Permanent TSB and Ulster Bank are covered by the targets. EBS Building Society, which is part of AIB, is also covered.
More than 21,000 people have local authority mortgages and about one-third of these are in arrears, according to figures from the Department of the Environment, Community and Local Government.
About 16,000 homeowners have an INBS mortgage and the Sunday Independent understands more than one-third of these are in arrears.
When contacted by this paper last week, a spokesman for the IBRC, which now holds INBS mortgages, declined to comment on these figures.
A spokesman for Danske Bank said last week that the number of its customers in mortgage arrears was "well below the market average".
"We work closely with our customers to assist them in finding solutions to mortgage difficulties as soon as possible," added the spokesman.
Brendan Burgess, a longstanding critic of the former INBS and founder of the website askaboutmoney.com, said: "People in mortgage distress should be getting sustainable mortgage solutions – irrespective of who their lender is. The former INBS and local authorities are the lenders with some of the biggest levels of arrears – yet they're not covered by the Central Bank targets."
Last September, Dublin City Council said that it had repossessed 72 houses between 2010 and 2012 because arrears on its house purchase schemes (where the council offered mortgages to help people buy their own home) had tripled.
"Despite not coming under the remit of the Central Bank, Dublin City Council has always taken into account the personal financial circumstances of all mortgages in arrears, with a view to finding a mutually agreeable payment resolution," said a spokeswoman for Dublin City Council. "To that end, we actually go way beyond the terms of the Central Bank targets."
A spokesman for the Housing Agency, which supports local authorities in the delivery of housing, said: "Local authorities have always dealt sympathetically with borrowers experiencing difficulties in meeting their loan repayments and have applied forbearance measures to help such borrowers over many years. Targets for local authorities to deal with mortgage arrears similar to those set by the Central Bank are not in place at this time – though measures to alleviate borrower difficulties are constantly under review by local authorities and the Department of the Environment, Community and Local Government."
A spokeswoman for the Central Bank said the lenders that fall under its targets "cover the vast majority of the mortgage book in Ireland".
"We will examine whether we should extend the targets to other lenders in due course," said the spokeswoman.
The spokeswoman added that the IBRC was covered by the Central Bank's code of conduct on mortgage arrears, which sets out guidelines for lenders when dealing with those who are struggling to repay their mortgages.