Lenders criticised over arrears

Lenders criticised over arrears

The Central Bank has this morning criticised lenders over how they are dealing with the problem of mortgage arrears

The Central Bank’s head of banking supervision Fiona Muldoon has sharply criticised the banks for their slow progress in tackling mortgage arrears cases saying that the scale of the problem showed that “wait and see” had become the strategy of choice for lenders.

Speaking to the Irish Banking Federation’s annual conference, Ms Muldoon questioned the commercial rationale behind the “wait and see” strategy for dealing with mortgage arrears.

“Further falls in asset values have just simply increased ultimate losses for both bank and borrower alike,” said Ms Muldoon, who is the director of credit institutions and insurance supervision at the Central Bank.

Revealing for the first time that there were 48,000 buy-to-let mortgages either in arrears or which had been restructured to help struggling borrowers, Ms Muldoon berated the bankers for failing to offer meaningful solutions to the mortgage crisis.

“Stuck in stasis, but least hunting with the pack, I see too much ‘activity’ and not enough ‘outcome’,” she said.

“I see too much ‘give the Central Bank exactly, literally, what they asked for’ and not enough true dialogue and meaningful engagement to find a solution. I see way to many ‘extend and pretends’ masking as solutions.”

She asked the bankers whether they were instead hoping for an economic recovery or an increase in house prices or that the new personal insolvency legislation would deal with arrears cases.

“This is the stuff of denial. Hope is not a strategy – any more than anger,” she said.

Read more in The Irish Times.

Source: Simon Carswell / Irish Times.com

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