Saturday, October 26, 2013

26/10/2013: Local Authorities Loans Arrears


While we know about the crisis in mortgages extended by the banks, we have very little information on the housing loans extended by the local authorities. These are not reported, nor published. The figures are hidden out of view of the public. Last week, Irish Independent made public the latest aggregate data on these. read the article here: http://www.independent.ie/irish-news/twothirds-of-local-authority-homes-loans-are-in-arrears-29696111.html

Aggregate numbers are horrific: of total 20,277 local authority loans, 6,275 are in arrears of at least 90 days. No data was provided on arrears under 90 days. In ordinary owner-occupier mortgages, 'only' 12.7% of accounts were in arrears 90 days or longer in Q2 2013.

Keep in mind, local authorities loans were supplied on the basis of exceptional discounting of prices on underlying properties, implying that local authorities can simply convert loans into rent schemes back and cover the interest costs of property carry... hopefully... unless...

It is extraordinary that there is no reporting of and accounting for the potential losses carried by the local government in Ireland.
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