Ireland’s Homeowners: Global Champions in not Repaying Mortgages

Source: Quartz via Deutsche Bank, Moody’s



Cyprus? Pshaw. Greece, Italy, Spain Portugal? Puh-leeze. 

Ireland sets the bar for what mortgage arrears looks like ina  country bankrupted by their financial sector and hoodwinked by a bank bailout.

The chart above, showing mortgage arrears on the emerald isle, may be the single most insane chart I have ever seen.

And the details underlying it are just as insane. Via Matt Phillips at Quartz:

• 25% of Ireland’s home loans are distressed  (S&P)

• 11.9% of Ireland’s mortgages late by more than 90 days (Irish Central Bank)

• Deutsche Bank believes its closer to 16%

• 35% of mortgage arrears are “strategic non payments” (Gregory Connor, Maynooth University)

Oh, and the country’s National debt is up 4X as Unemployment rate has risen above 14%.

The full article at Quartz is well worth your time.



Welcome to Ireland, where mortgage payments are apparently optional
Matt Phillips
Quartz, April 2, 2013

Category: Bailouts, Foreclosures, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “The Most Insane Chart Ever: Irish Mortgage Arrears”

  1. BennyProfane says:

    Wait, what? But, but, I’ve heard the smartest people dressed in the best suits tell me on my TV that Ireland is the model that those slackers in Club Med should be imitating. It’s been called a success! Some success.

    Meanwhile, the Dutch can actually be more under sea level than they are now:
    And, that’s a country that is home to the fellow who just told the rest of the continent that their bank deposits are fair game in the future. What a circle j**k.

  2. david_12321 says:

    Or the Irish have it right. Best quote – “And they don’t like it.” (from the lenders). Why no quotes or bits of wisdom from any of the 1 in 9 Irish who figured it out?

  3. rd says:

    Compare it to Cyprus it three years. The Irish will look like model financial citizens then.

    It is why Iceland returned to fishing instead of banking. The outside banking world screamed, but they simply bit the bullet and went back to basics.

  4. AHodge says:

    i see Denmark is not on this chart
    the IMF just gave them a rare “stop that” namely givingmaking interest only mortages,. and i hear has similar mortgage defaulter problems.
    is 14% so bad? there were US pools where they nearly all went into default?

    Add this into the roughly 2 trillion of losses that ray Dalio (and I) think reside in european banking.
    The trading markets literally have no idea what to watch for in Europe. cyprus blows over,while it will likely produce an accelarating credit contraction, there are few observable immediate effects, esp as the banks are liquidity backstopped. Big short coveringrally ensues. fortunately my shorts unlevered enough to ride this week out
    This remind me a lot of the false liquidity backed respite US markets got in summer 2008.. but september is coming

  5. bueno says:

    BR – one reason why these numbers look so insane compared to other economies could be the tiny number of foreclosures in Ireland (38 in total in Q4 2012). With the lack of that deterrent, non-payment is not discouraged, and mortgages tend to stay in arrears for much longer than they would in other economies. A knock on effect of this is that the banks don’t have to realise losses on those problem loans… Either way not great news for us in Ireland!

  6. Mike in Nola says:

    Like Latvia, another “model” held up as an example by the Troika, it is bleeding skilled workers who can only find jobs by emigrating.

  7. Herman Frank says:

    I think the headline is a bit over the top. We’re only talking 14%! I would say that “the Irish system is the only honest system”. All over the world the banks would prefer to kick this can furthest possible into the distant future, instead of having to go for more capital hat in hand. There’s no one who will give them that kind of capital! Just imagine them immediately evaporating the capital contribution into write-offs for a portfolio which doesn’t have a chance in this generation to recoup the losses again. No, we’re best served by a “close your eyes and don’t move”-attitude. Who ever is first declared “naked” loses.

  8. Moss says:

    Strategic non-payment. Rugged individualism at its finest.

  9. dirge says:

    I do wonder how many of those non-performing loans are for ghost estate properties.

    The banks are terrified of writing down/off these properties.

    I’m not sure why we should be surprised by the lack of foreclosures; there’s no one to buy the properties and banks aren’t lending anyway. New mortgages have dropped to almost nothing. Kicking people out would just lead to the properties rotting away.

  10. Jbones2 says:

    I think it was about a month ago where James Bianco, w/ Rick Santelli, praised the Irish economy and it growth outlook. Their prospects look great if you ignore its bankrupt banks and the large yearly wave of Irish emigration (I believe approx 75,000 Irish emigrated in 2012 alone). I hope I misinterpreted Bianco b/c he’s does good work in most cases

  11. Marc P says:

    BR, you should overlay that chart with the US figures. I don’t know what the author of the chart means by “late stage mortgage arrears” but in the US, the current figure is 6.78% in arrears, which is the lowest since 2008.

  12. gman says:

    It was the CRA and Barney Frank…

  13. CitizenWhy says:

    But isn’t Ireland basking in the good will of the IMF and the World Bank and the ECB? How then is it possible that their debt keeps shooting up to an unpayable level and more and more face poverty or must emigrate to non-austerity countries to avoid poverty? How can that be?

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