House repossession remains at very low level, says IBF
Data published today by the Irish Banking Federation (IBF) confirms that house repossession remains at a very low level here. The total number of houses repossessed by all mainstream mortgage lenders in 2008 was 96. At 0.01%, this represents a fraction of the total number of mortgages issued.
The level of repossession of residential properties in Ireland is very low by international standards. For example, for every 10,000 mortgages issued, one results in repossession here compared with 35 in the UK – demonstrating a significantly different approach to arrears management between the two markets.
Furthermore, the recent introduction on a statutory basis of the Code of Practice on Mortgage Arrears (which builds on the original IBF voluntary code), and its extension to cover all mortgage lenders, will provide an added measure of reassurance to mortgage borrowers at this time. Under the Code:
Lenders must adopt flexible procedures for handling mortgage arrears and assist the borrower as far as possible – whereby consideration can be given on a case-by-case basis to deferral of payments, extending term of mortgage, changing type of mortgage, or capitalising arrears and interest
Lenders must wait of at least six months (12 months for the two recapitalised banks) from the time of arrears first arising before applying to the court to commence legal action for repossession.
“While the number of repossession applications to the courts has increased, this number bears little or no relation to the actual number of properties repossessed”, according to IBF’s Chief Executive, Pat Farrell. “Increased activity in this area is reflective of the general economic slowdown and we can expect this to continue to be the case. However, the importance and value of early communication by borrowers with their lenders cannot be emphasised enough. Where repayment difficulties arise for some borrowers because of changed economic or social circumstances, the borrower should talk to his/her lender at the earliest opportunity”, he stated.
Note to Journalists
The Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Further Information: Felix O’Regan, Head of PR and Public Affairs, IBF, tel. 6715311, 087 6481644