Selected price growth rates from 1996 to 2005

The Irish sub-prime and non-conforming mortgage market will be driven by short-term, credit repair mortgages from consumers looking to establish and repair their personal credit history with the mainstream banks. This is according to Irish Mortgage Corporation, Ireland’s leading independent mortgage broker.   

“There continues to be significant pent-up demand for sub-prime and non-conforming product from Irish consumers,” this is according to Mr. Frank Conway, Director with Irish Mortgage Corporation.

Recent announcements by several banks of plans to enter the sub-prime / non-conforming market have been welcomed by Irish Mortgage Corporation. “Greater competition will ensure better products and services for consumers”. Currently, Ireland has just 2 functioning sub-prime / non-conforming lenders, GE Money, part of the US General Electric group and Start Mortgages, which is affiliated with the UK’s Kensington Group.

“Unfortunately, mainstream Irish banks chose to neglect the sub-prime / non-conforming arena for far too long. Foreign lenders were first to market resulting in Irish lenders now having to play catch-up.” The overall value of the Irish sub-prime market is conservatively estimated to be valued between €2 - €3 Billion annually.

Sub-prime and non-conforming mortgages are typically taken out by consumers who experience problems getting a mortgage from traditional banks, for a variety of reasons. “Sub-prime and non-conforming mortgages are not just for people with poor credit histories. For example, one major reason why some consumers fall into the sub-prime / non-conforming category can  be as a result that that they do not have an established credit history here in Ireland, such as in the case of recent immigrants.

Through it’s sub-prime /non-conforming division, (moneyzone.ie) which recently celebrated it’s 1-year anniversary, Irish Mortgage Corporation has discovered many of the reasons consumers avail of a sub-prime / non-conforming mortgage include:

·         Recently becoming self-employed

·         Recently relocating to Ireland

·         Self Certification

·         Contract Employment

·         Irregular Income, and

·         Recently separated

·         Passed credit problems

“Irish banks are finally focussing their attention and developing an understanding of the complexities of the sub-prime / non-conforming mortgages, consumers who up to now were limited in their borrowing options are increasingly being offered a more diverse range of mortgages.” Said Mr. Conway.

Frank Conway worked in the development of the sub-prime market in the US between 1992 and 2004.