Thousands of homeowners in mortgage arrears
More than 28,000 homeowners are three months behind with mortgage repayments, official figures revealed today.
The Central Bank said lenders issued formal warnings to 5,096 households as they sought to recover debts of about €70m.
The second quarterly report revealed 152 homes were repossessed in the final three months of the year which included 17 homes being surrendered to lenders voluntarily and 11 others abandoned.
According to the review, there were almost 793,000 household mortgage accounts worth €118.3bn in Ireland.
The Irish Banking Federation said there had been a drop in the number of repossessions compared with the summer.
The group also said its members made every effort to avoid repossession with an overall rate of 13 per 100,000, compared with 93 per 100,000 in the UK.
The Regulator's data showed:
- €5.3bn is owed in total on mortgages in arrears for more than 90 or 180 days;
- 233 court enforcements were launched in the final three months of the year as lenders sought to recover €10.2m of arrears;
- Finance houses had about 397 repossessed homes on their books at the end of the year after another 27 were taken on foot of a court order and 74 were abandoned or surrendered.
Finance Minister Brian Lenihan said he welcomed the decrease in court actions against those in debt.
“I also welcome the finding that almost half the cases that went to court were settled on the basis of a renegotiation of the term and/or other conditions of the mortgage,” the minister said.
“It is in all our interests, including the lenders, that families hold on to their homes and that repossession is the very last resort.”
An expert group under Hugh Cooney begins work this week on responses to the problems of mortgage arrears and personal debt.
The country’s largest housing association, Respond, claimed the figures do not show the true number of families in difficulty.
It claimed 30,000 people have switched to interest-only mortgages to reduce bills and fears they may still run into trouble with repayments.
Spokeswoman Aoife Walsh said: “This fact is not reflected in today’s figures and we are concerned that when interest rates increase, so too will the struggle and stress facing families on a daily basis.
“A very large portion of these mortgage holders are already on the brink of default.
“The smallest interest rate increase by banks or the European Central Bank, or any further reduction in income, will push them over the edge into mortgage default and possible legal action in 12 months’ time.”
Respond said the expert group needs more detailed information on mortgage holders from the banks.
“We would like the scope expanded so that all banks must also report on types of mortgages and levels of negative equity faced by homeowners every month,” Ms Walsh said.
“It is very difficult to find a solution to mortgage arrears and negative equity if we are not aware of the true extent of the problem.”
