Central bank Targets

Here is the statement from the Central Bank on mortgage arrears targets:

Statement 17 September 2013
In March 2013, the Central Bank announced targets (end June, end September and end December) for banks offering sustainable long term solutions for mortgage arrears customers. The Central Bank also intimated that targets for ‘concluded’ arrangements with mortgage arrears customers would follow. The Central Bank, in agreement with the Troika, has now set its expectations of the banks in this regard and requires banks to have concluded arrangements with 15 per cent of their over 90-day mortgage arrears customers by end of December 2013. Furthermore, the Central Bank is now setting expectations for end March 2014 for sustainable solutions offered to customers to reach 70 per cent of over 90-day arrears and for concluded solutions to reach 25 per cent.

What does it mean? It means the banks had to make a certain number of ‘offers’ (20% by end of June) but to have ‘concluded’ them by December 2013, which means get signatures or agreements.

Effect: One of two things, we’ll either see a lot of write-downs, split mortgages and other long term forbearance measures, or we’ll see a large ramping up in completion of legal proceedings which have proved popular to date.

There is a trade off here, legals can get ‘completion’ without client consent, it also reduces the barriers to banks in opting for this as a ‘quick fix’, but equally, they may well never pursue the client legally meaning it all drags out for longer. The other choices can be more costly for a bank, take longer to do (reduces banking confidence and perhaps state cost) and some appear not to work at all (mortgage to rent) on an operational level.

Interesting times.



  1. 2Pack

    Yo Karl, 2, (*an original person of the) Family Pack here.

    I have a sneaking suspicion that the banks are planning to outsource this work on a very large scale…once they have completed their redundancy programs. They won’t until they complete their redundancy programs as they don’t wish to admit that they actually have plenty of work for the staff they plan on letting go.

    I think AIB will have completed it by March 2014 so expect an announcement and rampup thereafter. AIB have an OK mortgage book on PPRs but their BTL book is as bad as anyones.

    PTSB who have a fairly diabolic book have completed their redundancy program I hear and may go to outsourcing sooner. I’d say their political masters are in no hurry to let them what with an election next June. But they may announce something in Q4 2013. 🙂

    “From PTSB


    Total Group employee numbers have continued to reduce. Following the sale of the Life Group employee numbers at end 2012 were 2,305 compared to 4,407 at end 2011.

    In permanent tsb, 313 employees availed of VSS. Average employee turnover at permanent tsb during the 2012 was 26%.

    The Group is committed to the personal and professional development of employees and has tailored its approach to suit the current business environment. A range of learning methodologies is used including: e-learning courses, podcasts, knowledge libraries, shared video content, e-mentoring and online competency testing. The e-learning courses produced in 2012 included courses covering the code of conduct on mortgage arrears, the consumer protection code and dealing with customer complaints.

    The Group runs Health & Well-being programmes each year which focus on a variety of health aspects including physical fitness, diet and lifestyle.”

    • Karl Deeter

      lol.. I love that freeman of the clan of 2pack stuff! It’s already happening, even internally collectors are now forming processing divisions meaning you don’t deal with a person, you go into a production line of MARP and at the end are a few assessors (reverse underwriters).

  2. 2Pack

    Most of managing the arrears is a computer system and a call centre. I do think it will be outsourced as I heard a few of the Larger UK operations were approached for a quotation early this year and offered a space in a bank owned building in Dublin to give it the appearance of being internal. But not till the redundancies are done.

    The ‘final’ resolution will be kicked to an internal group if it is other than performance.

    Your piece on the Kilkenny trust scam last month was very well done, I fear they picked up a good few millions in UNENCUMBERED deeds as well as the dross the bank already has as collateral.

    Freemen are veeeeeerrry well known for financial fraud/ (fake and vexatious liens a specialty) in the US .There were, I hear, a core group of 7 or 8 involved in boilerhousing that scam around the southern half of the country.

    Has anyone, after all, ever reversed a property out of a trust themselves ( the banks will have no problem but what about an individual ????)

    Too late for the victims I fear. Even if the scammers only get away with €10m of tradeable property in the end it was a fair old scam for the 6 months it ran riot nationwide. Well done for that blog piece…much more you than snarking in twitter, what what !!!! 🙂

    It may have run a lot longer had it not been for yourself and the examiner in particular.

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