25,000 lose ownership of their homes in six months as banks tackle arrears

More than 25,000 people who were in arrears lost their homes between April and September, according to the latest figures from the Central Bank.

Fiona Muldoon: Quit job.

The banks dealt with 47,087 mortgages in arrears in the period.

The figures emerged during the Central Bank’s audit of the banks’ attempts to tackle the massive mortgage arrears crisis.

Last March, the Central Bank announced that the six banks covered by the scheme — Bank of Ireland, AIB, PTSB, Ulster Bank, ACC, and KBC — had to put in place offers to 20% of customers in arrears by the end of June. It found the banks had exceeded this target and had made offers to 33% of distressed borrowers by this date.

At the end of the second quarter, the six banks had dealt with 34,890 customers in arrears, which resulted in 13,403 restructured mortgages and 21,487 cases of loss of ownership.

By the end of September, the banks had dealt with 47,087 customers in arrears, which resulted in 21,177 restructured mortgages and 25,910 in loss of ownership.

Loss of ownership did not mean that 25,910 homes had been repossessed over that period. Rather, it includes mortgage holders who have surrendered their properties or agreed to a voluntary sale of their homes, as well as banks issuing legal proceedings in order to repossess the homes of owners in arrears.

It is believed the high volume of loss of ownership showing up in the audited figures stems from the large volume of legal letters issued by the banks to meet the Central Bank targets.

The latest review shows that 55% of the latest tranche of offers are for repossession or voluntary surrender; 99,189 borrowers are three months behind in repayments.

The banks said legal letters threatening repossession were issued to customers who had refused to make any engagement. However, not all would end up in repossessions.

The Central Bank said that over the lifetime of the mortgage arrears resolution process, there would be a much greater proportion of mortgage restructuring than loss of home ownership.

The Central Bank also announced the resignation of Fiona Muldoon, the head of credit institutions and insurance.

She had been tipped to replace deputy governor Mathew Elderfield but lost out to Cyril Roux. Publicly she may be best remembered for a swin-geing attack on the banks last year where she compared them to troublesome teenagers.

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