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What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears

The Economic and Social Review

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Title What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears
 
Creator Lydon, Reamonn
McCarthy, Yvonne
 
Subject mortgages; Ireland; qunatitative methods
 
Description This paper presents a comprehensive analysis of Irish mortgage arrears using a new loan-level dataset which incorporates data from four Irish banks. We identify the main characteristics of accounts in arrears and examine the role of ability-to-pay and equity factors in the recent hike in mortgage delinquency rates. We find that borrowers who took out their mortgage for buy-to-let purposes, those with high loan-to-value ratios and those with high repayment burdens are all more likely to be in arrears. This is also the case for borrowers with properties in regions that have suffered more severe economic shocks, as proxied for by changes in the regional unemployment rate. Our empirical analysis suggests that affordability issues and general macroeconomic developments have had an important and sizeable effect on arrears trends over time, suggesting that policy efforts to target the growing level of mortgage arrears need to take account of these issues.
 
Publisher The Economic and Social Review
 
Contributor —
 
Date 2013-09-10
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://www.esr.ie/article/view/66
 
Source The Economic and Social Review; Vol 44, No 1, Spring (2013): Irish Economic Association Twenty-Sixth Annual Conference Dublin April 2012; 117–150
0012-9984
 
Language eng
 
Relation http://www.esr.ie/article/view/66/57
 
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