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Irish borrowers affected by the economic crisis caused by Covid-19 will be able to extend the interruptions in the repayment of the loans from three to six months after the banks and other lenders and mortgage administrators signed an extension of a relief plan announced the month past.
More than 65,000 mortgage payment interruptions and more than 22,000 small and medium-sized business (SME) payment breaks have been granted since the industry agreed to provide relief on March 18, the Irish Federation of Banks and Payments said on Thursday ( BPFI). .
“Existing public health measures implemented by the government, aimed at mitigating the impact of COVID-19, have been extended since BPFI’s original announcement of payments was suspended for up to three months,” said BPFI chief executive Brian There is.
“These measures may need to remain in place for some time or may only be phased out with an unknown impact on the economy going forward.” BPFI members greatly appreciate the severity of the impact on families, individuals and businesses, and it is for this reason that we believe that many customers may require an extension of the existing payment disruption beyond three months. “
Lenders who have signed up to offer payment balances include the top five Irish retail banks, non-bank lenders such as Dilosk and Finance Ireland, as well as a group of loan service companies that manage loans on behalf of investment firms, or the called vulture funds, which absorbed tens of thousands of distressed Irish loans in the wake of the financial crisis.
The Central Bank said that borrowers who take advantage of payment interruptions of up to six months will not be classified as having failed to make payments on their Central Credit Registry, while it is understood that the Irish Credit Bureau will adopt the same position.
“At the end of the agreed payment interruption, the Central Bank expects borrowers who can return full repayments to have the option of repaying the loan within the remaining term or extending the term of the loan,” the organization said.
However, banks are expected to begin evaluating how parts of their loan books will ultimately deteriorate as a result of the economic shock and will begin to make bad loan provisions in their accounts. The Central Bank said that it is not necessary to establish provisions at this stage for individual loans.
Nearly 600,000 are receiving special unemployment payments from Covid-19 in Ireland, while nearly 350,000 workers receive their subsidized pay under a government scheme aimed at helping companies that have been hit by the crisis since much of the economy has been blocked.
BPFI said banks will be “actively contacting” customers who have taken advantage of payment disruptions in the coming weeks and months about the possibility of extending their new deals. “Customers do not need to contact their lender. Suppliers will contact clients, ”said Mr. Hayes.
Payment interruptions of up to six months will also be offered to Covid-19 affected borrowers who have not yet applied for assistance.
Meanwhile, the European credit rating firm Scope said in a report on Thursday that it expects some payment interruptions to evolve into loans that become defaulting.
“We expect a rapid deterioration in mortgage defaults as household incomes drop significantly, especially among loans that are re-executed,” Scope said, referring to loans that had been restructured after the financial crisis. and where borrowers are meeting their new terms.
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