ALMOST 4% of Irish mortgages are now in arrears for more than 30 days (or "delinquent''), while the number of borrowers more than 90 days in arrears has more than doubled in a year, according to a report to be sent to banks and released to the Irish media this week.
The report by Standard & Poor's is the latest, most detailed account of stresses in the mortgage market. It shows that of the €37bn of securitised mortgages rated by the agencies, €1.4bn are now termed delinquent, a term referring to any mortgage more than 30 days behind its agreed payment schedule.
Despite the delinquencies, the agency says there have been very few re-possessions so far because of Ireland's "borrower-friendly'' legal and banking system. However it warns that re-possessions will rise and losses on mortgages for banks are likely to be severe.
"Rapidly decreasing house prices in Ireland, combined with more leveraged borrowing terms, give concerns for future likely loss severities realised on sold repossessions in this market,'' the agency concludes.
The rate of delinquent mortgages is now higher than the UK.
The agency's report covers Residential Mortgage Backed Securities (RMBS). The Irish-based banks have issued €37bn of these securities in recent years. They are backed by domestic mortgages originated by Irish institutions.
The agency's figures are not an analysis of the entire mortgage market, just those mortgages which have been securitised through RMBS vehicles. However they are a highly representative snapshot.
A securitised vehicle by Irish Life & Permanent, Fastnet 2, reports the highest delinquencies at 5.8%, followed by First Active's mortgage vehicle Celtic 12. It's impossible to say whether these vehicles are representative of the entire portfolio of mortgages at these institutions, but they indicate significant stresses in large parts of their loans.
revealed: mortgage arrears
The number of mortgages 30 days in arrears is up 86%
€1.4 billion of mortgages now in arrears of €37bn rated by agencies.
Irish Life & Permanent has highest delinquency ratio at 5.8% in March
First Active has 5.4% rate, leaving it in second position.
The number of borrowers in arrears for over 90 days has more than doubled.
Despite rise in arrears, virtually no reposessions yet.