Mortgages missing key documents
Mortgages missing key documents
More than one in ten mortgages held by the four remaining domestic banks is missing key loan documentation data such as property valuation, location or a property identifier, according to information in a technical paper published last week by the Central Bank.
More than 78,000 mortgages out of 688,000 loans surveyed for the study are missing key bits of documentation, which meant they had to be excluded from the Central Bank's detailed analysis of negative equity and arrears in the Irish mortgage market.
The loans represent €8.2 billion worth of mortgage debt out of nearly €87 billion held by AIB, Bank of Ireland, Permanent TSB and EBS.
The poor data quality could complicate the banks' ability to take security on the loans in the event of a default or voluntary surrender.
It could also give rise to legal challenges from borrowers who are involved in the repossession process or other legal resolutions of their debt problems.
Similar issues with bad loan documentation led to greater haircuts for the banks when Nama transferred billions in assets in 2009 and 2010, while banks in the US have been stopped from pursuing delinquent borrowers where loan data was incomplete or missing.
The gaps were discovered as part of an analysis by Central Bank researchers who were producing a paper for a conference on the Irish mortgage market on October 13. They found 10,094 loans lacked a property identifier, 35,044 had no initial valuation, 15,413 had no valuation date, and 18,628 specified no geographic location.
The news comes as BOI, KBC and PTSB have all reported a spike in arrears due to selected repayment of unsecured debt over mortgage debt in the wake of policy debates over debt forgiveness and a new bankruptcy and non-judicial debt settlement regimes.
Monday, November 14, 2011
Property - Society of Chartered Surveyors Ireland Property and Construction News - Mortgages missing key documents
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