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The Solution Waterfall: Insights From Irish Mortgage Distress Cases

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  • GorÅ¡e, Patrik

    (Central Bank of Ireland)

  • Joyce, Thomas

    (Central Bank of Ireland)

  • Lyons, Paul

    (Central Bank of Ireland)

Abstract

In this Insight, we examine how banks and Loan Servicing Firms (LSFs) approach resolving mortgage arrears using a sample of distressed mortgage cases from 2024. LSF portfolios contain deeper legacy arrears cases than retail banks. In our sample: Banks made greater use of short-term arrangements; LSFs made use of trial Alternative Repayment Arrangements (ARAs) while both offered long-term restructuring similarly. Borrowers at LSFs are approximately five years older than at banks (median age 56 vs 51) and: have higher mortgage balances; have accumulated higher arrears and; are currently repaying only 58% of their contractual amounts versus 80% for bank borrowers. 45% of LSF borrowers have no capacity to repay any of their principal balance, while another 22% would not be able to clear more than half their balance by retirement at current repayment rates. The equivalents are 18% and 16% for banks.

Suggested Citation

  • GorÅ¡e, Patrik & Joyce, Thomas & Lyons, Paul, 2026. "The Solution Waterfall: Insights From Irish Mortgage Distress Cases," Central Bank Staff Insights 15/SI/26, Central Bank of Ireland.
    • Handle: RePEc:cbi:stafin:15/si/26
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    File URL: https://www.centralbank.ie/publication/research-publications/staff-insights/the-solution-waterfall--insights-from-irish-mortgage-distress-cases
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