Borrowers and Lenders – The Irish Times

Sir, – If, as is often suggested, Irish lenders are making excess profits from higher interest rates, one would expect non-Irish banks to form an orderly queue to enter the Irish super profitable home loan market. Instead, non-Irish lenders who serve this market are heading for the door. In doing so, outgoing banks are not acting irrationally. We should think about why they leave and see what that tells us.

A clue is provided by Joe Brennan’s report (Business This Week, Nov. 11) on Central Bank data that shows more than half of overdue mortgage borrowers have paid nothing to their lenders in the last two years. More than 15,000 borrowers in long-term arrears, or 55% of the total, are “not cooperating”.

The complaint that mortgage interest rates are higher here than elsewhere in Europe is frequently heard. It is rarely noted that it is nearly impossible for Irish lenders to enforce the collateral they hold for home loans and that this inability means that performing borrowers pay, through higher interest rates, at both for their own loans and for those of tens of thousands of defaulting borrowers.

Ed Sibley, Deputy Governor of the Central Bank, made this point, but in suitably impenetrable terms. You reported (Business, July 14, 2021) on a Central Bank document which records that half of long-term arrears cases are “uncooperative” borrowers and quoted Mr. Sibley: -the cooperation, the functioning of the legal system to ensure the realization of collateral for lenders will continue to be essential to the effective functioning of the mortgage market for all Irish citizens”.

In perhaps more accessible language, we will continue to have a dysfunctional mortgage market if our courts persist in believing that only borrowers have rights and lenders have none.

You regularly report cases that have reached the courts where the borrower is not only in default but has not repaid a penny on the loan for eight, nine or 10 years. We all know who pays for the borrower to live in their house without rent and without interest. – Yours, etc.,

Pat O’Brien,


Dublin 6.

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