An increased focus on different mortgage lending practices in euro zone economies is needed to incorporate new practices which would benefit the Irish consumer, the managing director of ICS Building Society, Mr Ted McGovern, said yesterday.
Speaking after the society's a.g.m., Mr McGovern, who is also chairman of the Irish Mortgage and Savers' Association, said specialisation services and securitisation practices common in the US, such as issuing mortgage bonds to investors, were already prevalent in some euro zone countries. Typically, a lender will sell the bond to an investor who recoups his money from the original home-buyer.
"With the specialists will come much keener deals for consumers over the long haul," Mr McGovern said.
He repeated his call for a change in mortgage lending criteria from the current 2.5 times a person's salary, saying "a reasoned, balanced debate" was required on the issue.
Earlier this week, ICS cut its one-year fixed rate to 4.4 per cent and its two and three-year fixed rates to 4.99 per cent.
The chairman of ICS, Mr Pat Molloy, told the meeting the effect of increased earning power, lower personal tax rates and record low interest rates had to be recognised.
ICS made a pre-tax profit of £33.5 million (€42.6 million) in 1998, an 8.7 per cent increase over the previous year. Its new mortgage growth is valued at £250 million (€317 million).
