Time is running out for the older cohort of struggling borrowers


Ireland’s mortgage arrears problem is not going to go away. On the contrary, it is becoming more and more acute, especially for an older cohort of troubled borrowers.

Deputy Central Bank Governor Ed Sibley revealed this week that a quarter of all those with long-term arrears on their mortgage payments are in their 60s or over. That’s over 7,000 people or families living in fear of losing their homes.

As they enter their sixties, they are strapped for earning power. Just when they are supposed to be contemplating retirement and a slower, more relaxed pace of life, they fear more and more that any chance of overcoming their financial problems is rapidly diminishing.

Sibley’s comments came in an address to the Banking and Payments Federation of Ireland – the industry body that represents banks. Essentially, it’s a wake-up call to lenders that their clients who are in financial difficulty are not a cohesive group to which a common solution can be applied.

He particularly drew attention to the banks’ use of arrangements which involve paying only interest on loans over a long period without any assessment of the feasibility of the outstanding lump sum capital ever payable.

He said more innovation was needed with a focus on solving long-term affordability issues. In other words, as Brokers Ireland – the organization that represents mortgage brokers among others – puts it more bluntly: stop kicking the box down the road.

Everyone accepts that the banks are trying to help their customers solve the problem.

The problem is, lenders seem to settle for one or a small set of preferred solutions, and then try to fit very different issues into one arrangement.

Time is running out for many of these clients. Putting the problem on the banks’ fingers is not a solution for anyone. Pain is inevitable, but it must be shared.

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