Last week the Institute of Banking held a forum on behalf of the Irish Mortgage market in which Deputy Governor Ed Sibley delivered a speech addressing much of what is prevalent in the country today.
It began by briefing the current housing situation in Ireland. Simply put, it’s dreadful. As many are on the pursuit of suitable housing the “toxic legacies of the financial crisis” are proceeding to cause mayhem throughout the nation.
The forum started by discussing the role of the central bank. The central bank plays a much greater part in the overall mortgage market than one may think.
It is up to the central bank to ensure that “the economic and social good of mortgage provision is prudent, sustainable, and that the best interests of consumers are protected. “
The central bank has had to take extensive interventionist movements in the Irish mortgage market since the financial crisis as Ireland typically experiences extreme economic and human hardships when these certain risks arise.
In order for the mortgage market to function properly, consumers need to be treated fairly with clear contractual terms in place to support any decision making and prevent any inconsistencies from happening.
A functioning, well off mortgage market should also be able to deliver a sufficient supply of homes to meet public needs while also being affordable to consumers.
This was a vital part of the speech that was given as many buyers in which are feeling the hardships of the crisis look for someone to blame. The Central Bank being a primary candidate to turn to.
When finally he recapped on the basics of the mortgage market and the housing crisis currently facing the nation, he moved onto the Irish mortgage market today.
Mortgage loans are extremely important and impactful in the Irish economy and without them, there will be an abundance of risks that arise.
As the crisis worsens, it has been seen that people have been backing out of the housing market, meaning less mortgages to be taken out…adding to the negative impact on the economy.
At the end of the 2017 fiscal year, residential mortgage loans accounted for approximately 58% of banks total gross loans. Definitely a substantial and driving factor in the economy.
Ireland is seeing more and more borrowers go into arrears on their payments with loan payments being over 2 years past due!
The central bank is diligently working on ways to help and educate borrowers as they teach them effective ways to save and stay on track with payments.
Ed Sibley concluded his forum by providing a positive outlet for borrowers as enthralling on the central Banks plan to welcome vast technological advancement into the finance sector that will have a positive impact on the mortgage market in primary reference to the timeliness of job completion.
Overall, he made an important point that the key function of the financial services system is to provide borrowers with the loans that will allow them to purchase their funds with.
By doing this their efforts are used to support the housing market as well as prospective home buyers.
One significant takeaway from this speech would be that in order to help the overall crisis happening, help and support from all as well as “maintaining an eye to the future” is needed.
By the individuals of the community coming together to lift the economic slump that is falling over the nation, it is possible that there is a way out.
