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Tenth of Irish homes behind on mortgage

February 18, 2012 • Ireland, News,

Householders who have borrowed to pay for their homes are struggling to keep up with mortgage repayments. (File pic)

Beleaguered householders are giving up on mortgage repayments and walking away from their homes at a rate of one every day in Ireland, according to a report.

Latest figures reveal more than 70,000 home loans have now slipped into arrears with nearly 75,000 mortgages restructured to help borrowers cope with their financial burden.

The Central Bank report shows almost one in every 10 home-owners has fallen at least three months behind in their repayments.

Opposition parties have accused the Government of crippling inaction over the crisis which is taking its toll on tens of thousands families across the country.

Some 133 properties were repossessed by lenders between last September and the end of the year, the figures show.

Fifty of those were seized on foot of court orders.

The remaining 83 homes were either voluntarily surrendered or abandoned – representing one borrower putting their keys through the letterbox and walking away from their home every day.

But the Central Bank said the total number of repossessions during the three-month period was down 18 per cent – from 162 properties – compared with the previous three months.

The New Beginning organisation, which helps those in mortgage arrears and debt distress, said the figures prove the problem is getting worse.

“The real concern remains the almost complete absence of medium and long-term solutions to this huge social and economic problem,” said spokesman David Hall.

“It is to be hoped that the new personal insolvency legislation, currently before the Oireachtas, will begin a process where society can finally begin to address the crisis.

“This will involve the lenders recognising their culpability and being willing to take their fair share of the pain involved in putting in place realistic and long-term solutions.”

Some 70,911 private residential mortgages, out of a total 768,917 in Ireland, had lapsed into arrears of 90 days or more by the end of last year, the figures confirm.

That represents a jump of around 8,000 from just three months earlier at the end of September.

Repayment plans for 74,379 mortgages were restructured, up almost 7 per cent over the same period.

Just over half of these restructured mortgages are in trouble with arrears.

Almost 25,000 home-owners are only meeting interest payments as part of renewed agreements with lenders.

In total, 107,708 home loans are either in arrears of three months or more or have been restructured and those repayments are being met – or almost one in seven of all borrowers in some difficulty.

Michael McGrath, Fianna Fáil finance spokesman, said the actual picture was even worse as the Central Bank report does not publish the number of mortgages in arrears of less than 90 days.

“However, we know from information released to the Oireachtas Finance Committee that some 46,634 mortgages were in arrears of less than 90 days at the end of June 2011,” he said.

“Therefore, the actual number of mortgages experiencing some level of distress is likely to be closer to one in five.”

Mr McGrath accused the Government of dragging its feet over its response to the Keane report on mortgage arrears and bringing in new personal insolvency laws.

Pearse Doherty, Sinn Féin’s finance spokesman, demanded an end to Government “complacency”.

“Government inaction is hurting families,” he said.

“People in mortgage distress want to see an end to Government complacency. They do not want more expert reports or pilot schemes.

“They want the Government to put pressure on banks to reach sustainable agreements with their struggling mortgage customers.”

Mr Doherty called for negotiated debt write downs to enable people to stay in their family homes.

“Anything short of this will see hundreds of more families fall into serious mortgage distress,” he said.

Bernard Sheridan, director of consumer protection at the Central Bank, urged those struggling to make contact with their lender as early as possible.

“It is important that borrowers co-operate fully with their lenders in order to be able to avail of the protections under the Central Bank’s revised code of conduct on mortgage arrears,” he said.

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