Judge Elizabeth Dunne has seen it all. She is a witness to Ireland’s economic collapse as she presides over repossession hearings. One in ten mortgages is experiencing trouble. Last year alone it was already estimated that around 79,000 borrowers were already behind on their payments or had a change in their contracts for them to catch up with their obligations. This is clearly an effect of the financial crisis that the country is having.
Irish mortgages is more than a third of the €270 billion of loans that actually remains with different lenders like Bank of Ireland, AIB, EBS Building Society and Irish Life & Permanent.
Bad debts may be reassessed as early as now as part of Central Bank’s stress test to the country’s lenders. This will also help them conclude how much of the €35 bn IMF/EU bailout plan is really needed by Ireland.
Banks are also seen giving out enormous forbearances on a borrower’s arrears. This is partly from the pressure of the Irish government but mostly banks don’t want to repossess homes because they don’t actually have any 2nd hand market to sell it to. At the end of 2010, lenders only repossessed 585 residential properties and this is based from the records of central bank.
