10% of owners struggle to pay mortgage
More than 100 homes were repossessed in the last quarter — taking the total number since records began in July 2009 to 422. The September-December rate of repossessions is the highest in 18 months since the Central Bank started detailing the extent of the arrears crisis.
The figures also reveal a 41% increase in the number of lenders asking the courts to take action against debt-hit homeowners. Banks, building societies and other mortgage providers took legal action in 297 cases.
The mortgage arrears data supplied by the main banks and compiled by the Central Bank showed:
* 44,508 mortgages (5.7% of all mortgages), valued at €8.6 billion, were over 90 days behind payments.
* 31,938 are 180 days behind.
* Banks allowed 59,229 households to restructure their debts.
* 521 repossessed homes are still held by the banks.
* 35,205 mortgages have been restructured and are classed as performing and not in arrears.
The report, the sixth since the mortgage arrears data was first recorded, found banks have helped homeowners to restructure 59,229 loans. However, the figures do not take into account some recent interest rate rises and the impact of the universal social charge.
There is also growing expectation that the European Central Bank will begin increasing interest rates later this year, possibly by September. This would impact standard variable and tracker mortgage holders.
Irish Mortgage Corporation director Frank Conway has warned many of those in arrears are “trapped”.
“An estimated 300,000 are already in negative equity and cannot switch to another lender even if they wanted to. Other lenders are not even accepting ‘switcher’ applications even where applicants have ample equity. It’s mortgage madness,” said Mr Conway.
Irish Brokers Association chief executive Ciaran Phelan said with 10% of homeowners unable to meet full mortgage repayments and the level of arrears spiralling, there’s a growing need for the next government to devise a solution.
“The current policy of forbearance, although welcome, is simply deferring and exacerbating the problem.”
Separate figures show just 28,000 mortgages issued last year — a drop of 43%. The Irish Banking Federation/ PWC mortgage market profile shows 5,624 mortgages worth €982m were issued in the last quarter of 2010. The value of all mortgages for the year was €4.75bn.
Meanwhile, a report by Ernst & Young has forecast if oil prices stay at $120 per barrel due to unrest in the Middle East, GDP could fall nearly 3% this year and rise by only 0.5% in 2012 leading to higher transport and heating costs.
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