The steep fall in Irish house prices may drive losses on foreclosed home loans to as high as 70 percent, according a Moody’s Investors Service report based on mortgage-backed securities it tracks.
“Over half the loans in even the best pools are in negative equity, whereas nearly every loan is in negative equity in the worst pools,” analysts Maria Divid and Barbara Rismondo in London said in a report today. “There is little chance that distressed borrowers will be able to significantly increase their debt service abilities; or materially reduce their negative equity.”
House prices dropped 49 percent from their high in 2007, Ireland’s Central Statistics Office said April 26. Prices may decline as much as 60 percent from that peak, Moody’s said.
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