Honohan on Primetime

Irish Central Bank governor Patrick Honohan was on RTE Primetime tonight, and I was particularly interested in the final part of his interview. In relation to mortgages, emphasis mine:

RC: We dont need to fight them of because no firesales.

RC: The number of people who are now defaulting on their mortgages..the people who are in serious trouble…

PH: They are in arrears…

RC: …in arrears…but some defaulting and with the possibility of an interest rates rise, real interest rates rise later in the year, possible more people will be pushed into that. Isn’t it possible that the mortgage book of these banks is in far more serious trouble than we’ve thought heretofore, and that the hole therefore is much bigger?

PH: Of course the biggest part of the banks’ books that were not taken into NAMA is the mortgage book. SO from that point of view the mortgage book is the subject of specific scrutiny in our country. We are tracking the increases in arrears were tracking the increases in renegotiations, renegotiation and rescheduling of loans where people are in difficulty is part of the bread and butter of the banks. There is an increase in the potential losses as time goes on, we’ve been tracking that. There are also of course the important human problems, family problems that need to talked about when you’re not talking about billions, you’re talking about hundreds of thousands.

So perhaps a hint at what might happen to mortgages? But just how big will the losses be? Probably – huge.

One thought on “Honohan on Primetime”

  1. Very simple
    big hole getting bigger. FACT
    More job losses equals no money to pay mortgage. FACT
    Create jobs or we will be sucked into a hole. we are in an event horizon… FACT

    End. dont need to be a masters in economics to see that.
    o yea i posted two years ago that job losses were set to rise and FF was going to be wiped out all but…
    Watch and shoot, watch and shoot as the irish default . Soon to be FACT..

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