by Calculated Risk on 3/29/2013 07:29:00 PM

An interesting article in the NY Times: Irish Legacy of Leniency on Mortgages Nears an End

Although there are more than 143,000 delinquent home mortgages in Ireland, foreclosures have been so politically and legally difficult that, in the last three months of last year, they numbered 38.

To put this in perspective, in the US there are about 5.1 million delinquent mortgages (from 30 days to in-foreclosure), and there were probably several hundred thousand foreclosures and short sales last quarter (Fannie and Freddie alone foreclosed on 60,000 properties last quarter). I'd expect thousand of foreclosure per quarter in Ireland, not 38.

In Ireland at the end of last December, nearly 95,000 mortgage accounts on private homes were delinquent more than 90 days ...

By international standards, Ireland has been slow to act on the problem. An analysis last year by Davy Research, part of a company that provides stock brokerage, wealth management and financial advisory services, estimated a 54 percent peak-to-trough drop in house prices and unemployment of 14 percent.

That was approximately parallel to one of the worst-hit real estate markets in the United States — the state of Nevada — where housing prices declined by more than 55 percent and unemployment hit 14 percent. But in Nevada, Davy found, the peak rate of delinquent mortgages hit 9.3 percent in the fourth quarter of 2009.

“The current Irish arrears rate of 10.2 percent and rising is now well above peak rates in comparable United States housing busts,” the report said. “A key difference between the U.S. and Ireland is the number of foreclosures” — 10 times higher in Nevada, the report said.

And now Nevada is recovering quickly. Thee unemployment rate in Nevada has fallen from 14.0% in late 2010, to 12.1% in August 2012, to 9.6% in February 2013. Of course Ireland has additional problems - being tied to the euro - but clearing out the delinquent mortgages is part of the process (modifications and short sales are alternatives to foreclosure).