Abhaile - a key factor in better Non Performing Loan statistics according to EU Report

January 2018

The level of “non-performing loans” (NPL’s) in Ireland continues to decline significantly, falling by close to 20% in the year to June 2017 according to a recent EU Commission progress report. The decline is due largely to the widespread use of loan restructuring solutions.

The report particularly mentions the work of Abhaile – the free mortgage arrears support service as a factor in these positive statistics. The service offers free, independent expert advice and support on financial and legal issues with over 10,000 vouchers issued to date. MABS (the State’s Money Advice and Budgeting Service) is the initial point of contact via their National helpline on 0818 07 2000.

Speaking about the reference to Abhaile in this EU report, Angela Black, Chief Executive, CIB said: “I am delighted with this independent recognition of the hard work of those working in the Abhaile service and the life changing impact the service offers to those in mortgage distress”. She added that MABS dedicated Mortgage Arrears Advisers have provided face-to-face mortgage arrears support to over 4,700 borrowers since July 2015.

In Ireland, there were approximately €34 billion of outstanding NPLs at September 2017, of which roughly 65% relate to mortgages. Approximately 45% of these mortgages have been restructured. Of the mortgages on principal dwellings – owner occupied homes – that are classified as restructured, 87% were deemed to be meeting the terms of their current restructure arrangement. The number of accounts for principal dwellings in arrears has continued to fall every quarter since 2013.

The trend on NPLs is downwards in nearly all member states, the Commission reports, but there “are remaining risks to financial stability and to economic growth, stemming from the still elevated level of NPLs”.

Non-performing loans are those where the borrower is not able to make scheduled payments to cover interest or capital reimbursements. When payments are more than 90 days past due, or the loan is assessed as unlikely to be repaid by the borrower, it is classified as an NPL.

Abhaile is jointly coordinated and funded by the Department of Justice and Equality and the Department of Employment Affairs and Social Protection. MABS, the Insolvency Service of Ireland, the Legal Aid Board and the Citizens Information Board are working together to provide the Abhaile service.