Richard Waldron

The Extent of the Mortgage Crisis in Ireland and Policy Responses

From the mid-1990s, Ireland experienced a property bubble, fuelled by deregulation in the banking sector and government commitment to expanding home ownership. However, since 2007, the situation has dramatically reversed. The banking system and property market have collapsed and pushed the Irish state into insolvency. National house prices have fallen by 50 per cent from the peak in 2007, whereas incomes have contracted and the unemployment rate has increased. This has produced a serious situation regarding negative equity and mortgage arrears, a problem highlighted by the former U.S. President Bill Clinton on a visit to Ireland in 2011. This paper examines government responses to the mortgage crisis, particularly their emphasis on mortgage forbearance and reform of Irelands bankruptcy legislation. An overview of the drivers of the bubble and the extent of negative equity and arrears is provided firstly. In conclusion, the paper reflects upon the implications of the crisis for the homeownership model that Ireland has followed for the last two decades.

“We’re just existing, not living!” Mortgage stress and the concealed costs of coping with crisis

Abstract Following the financial crisis, an extensive literature has examined the vulnerabilities facing mortgagors in default and foreclosure. However, in addition to these “overt casualties” of the crash, many households are struggling to meet their mortgage payments by enduring severe cutbacks to their quality of life. The experiences of these “unrevealed casualties” of the financial crisis and the coping strategies they employ to respond to mortgage stress remain under-explored. Drawing on survey data of Irish mortgagors (n = 433), this paper examines the impacts of mortgage stress upon quality of life and mortgagors’ coping strategies to respond to their financial difficulties. The findings suggest that mortgage stress affects a broader range of households than previously considered; mortgage stressed households adopt a range of expenditure, employment, finance and housing-related responses; and more punitive responses correlate with greater mortgage stress levels, thereby providing a fuller account of the real cost of coping with the crisis impacts.

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

Compared to the extensive assistance afforded to Irelands 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 debts contractual terms to ease a debtors 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.

Placing Heritage in Entrepreneurial Urbanism: Planning, Conservation and Crisis in Ireland

Ireland is beginning to emerge from an extended period of austerity following the global economic collapse of 2008. In this time, private sector investment in historic urban cores all but halted, a...