UK Only Article:
A billion shades of grey
Arrears and foreclosures
When the global housing boom turned to bust, mortgage arrears spiked. In America, the proportion of troubled loans rose from 0.2% before the financial crisis to a peak of 11% in 2012. In Ireland 18% of all mortgages are now in arrears; by value, they account for 23% of the market.
This crisis is partly self-inflicted. In Greece and Ireland, where foreclosure is very difficult, arrears have piled up. Greece has banned almost all repossessions since 2008. That means the total cost to local banks of the property crash is still worryingly uncertain. A recent paper from the Federal Reserve Bank of Atlanta found that slowing foreclosure in America lowered, rather than supported, property prices during the crisis. Banks may need to be cruel to borrowers to be kind to the wider economy.
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