Irish banks fielding 7,000 calls daily on mortgage breaks

The Republic’s five mainstream banks have been dealing with an average of 7,000 calls a day from homeowners since they agreed last week to industry-wide payment breaks for borrowers affected by the economic crisis caused by the spread of coronavirus, according to an industry lobby group.

The calls represent a mix of borrowers looking to avail of mortgage payment breaks of up to three months and distressed individuals making queries about the future, Banking and Payments Federation Ireland (BPFI) said.

Some of the banks have seen payment-break instructions rise from a typical level of 10-15 per week to between 800 and 900 a day.

There were fewer than 1,000 payment breaks in operation across the banking sector six months ago.

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The banks are also fielding an average of 500 calls a day from business customers seeking payment holidays or modifications to their loans, while there has also been a spike in companies making loan applications to tide them over.

The volume of calls reflects the level of distress among households and businesses as tens of thousands have lost their jobs amid the closure of pubs, restaurants, cafes, creches and other businesses due to the Government guidelines on social distancing to contain the spread of Covid-19.

‘Conservative’ estimate

Minister for Employment Affairs and Social Protection Regina Doherty said last week that as many as 400,000 people could find themselves at least temporarily unemployed amid the crisis. Yesterday she said that estimate now looked “conservative”.

BPFI chief executive Brian Hayes said: “Banks worked 24 hours a day over the weekend to make sure new, easy-to-follow systems were in place for customers impacted by Covid 19 and the staff helping them to make their application.

“All banks have dedicated Covid-19 website pages, with banks offering a combination of dedicated phone lines and online applications. All bank systems have been simplified and have been running live since Monday morning.”

There had been anecdotal reports last week of cases where individuals phoning up banks did not receive the level of support that had been agreed at chief executive level with Minister for Finance Paschal Donohoe last Wednesday.

Some customers of AIB, the country’s largest mortgage lender, for example, were last week informed of long-standing payment moratorium solutions, which required proof of a job and degree of savings. These do not apply to payment holidays being offered to customers impacted by Covid-19.

Longer-term solutions

“In some instances a three-month mortgage break may not be enough to help the customer and, while we will provide the three-month break for impacted customers, we may also propose an additional longer-term solution for a more sustainable mortgage,” a spokesman for the bank said.

All five Irish banks moved to allay fears among borrowers that significant restrictions are being placed on who will be able to avail of a break on mortgage payments in the event that their income is impacted by the Covid-19 pandemic.

The four other banks who signed up to the new protocols for dealing with borrowers who fall ill or lose their jobs or are otherwise affected by the pandemic also told The Irish Times that, contrary to what some borrowers say they were told after contacting banks, no one will have to have a certain amount of money on deposit with a bank before they will be considered for relief.

The Central Bank has also said it is working to ensure that those who require a payment break will not have their credit rating impacted in the longer term with a spokesman saying it was working to “develop practical measures so that the credit record of those who avail of a payment break get an appropriate recording on the Central Credit Register.”