(For)Bearing the costs of reckless lending: examining the response to the Irish mortgage arrears crisis

Richard Waldron and Declan Redmond

International Journal of Housing Policy, 2016, vol. 16, issue 3, 267-292

Abstract: Compared to the extensive assistance afforded to Ireland's banks since 2008, interventions to assist troubled mortgagors have been limited, with Government and the banks strongly resisting debt write-downs in favour of a policy of mortgage forbearance. Forbearance involves restructuring a debt's contractual terms to ease a debtor's repayment schedule. In practice, forbearance has been a strategy of ‘extend and pretend’ where lenders have been slow to offer restructurings or have relied on temporary interventions that impose minimal costs upon them. Forbearance benefited lenders by negating the pressure to enforce possession of devalued property, while ensuring borrowers remain solely responsible for outstanding debts. Despite the emphasis on forbearance, few studies have examined borrowers’ experiences of forbearance, particularly their experience of communicating their difficulties with their lenders. This paper first utilises national data to examine forbearance as a strategic response by the Irish authorities to the mortgage arrears crisis. Second, mortgage-stressed borrowers’ experiences of forbearance are examined using data drawn from a survey (n = 433) of mortgagors which dealt specifically with mortgage payment issues following the crash. The article documents a shift in lenders’ arrears management strategies from 2013, with an increased emphasis on longer term restructurings but also an increasing appetite for repossession.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/14616718.2015.1111500 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:intjhp:v:16:y:2016:i:3:p:267-292

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REUJ20

DOI: 10.1080/14616718.2015.1111500

Access Statistics for this article

International Journal of Housing Policy is currently edited by Professor Suzanne Fitzpatrick, Gerard van Bortel and Richard Ronald

More articles in International Journal of Housing Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().