65,000 home loans not paid in 6 months

More than 65,000 households have failed to make a mortgage repayment in at least six months, with figures from the Central Bank showing the extent of the problem continues to escalate.

There are now about 128,000 residential mortgages behind in repayments. However, the scale of the debt crisis is far greater, with the Central Bank currently collating the number of buy-to-let mortgages that are also in trouble. Davy Stockbrokers estimates that arrears in this sector could be as high as 38%.

An analysis of the figures to the end of June show:

* There were 83,251 mortgages in arrears for more than 90 days — up from 77,630 at the end of the first quarter. The value of these mortgages was €16.5bn or 14.7% of the €112bn owing on Irish residential mortgages.

* However, there was a slight decrease in the 45,165 mortgage holders in arrears for fewer than 90 days — down from 46,284.

* A total of 84,941 mortgages had been restructured by the end of June. How-ever, 44,720 of these had fallen back into arrears.

The level of repossessions is still relatively low — with 961 repossessed homes on the banks’ books to the end of June.

Pat Farrell, Irish Banking Federation (IBF) chief executive, said the volume of arrears was expected to rise.

“It comes as no surprise that, unfortunately, the overall stock of mortgage arrears continues to grow and indeed is likely to do so for some months yet because of the economic and financial backdrop.

“However, the continuing reduction in the pace at which the stock has been growing is very welcome and we must hope that this trend will continue.”

The banks have introduced a series of forbearance measures over the last number of months to deal with arrears. The Government hopes to have new bank-ruptcy laws up and running next January through the Personal Insolvency Bill.

However, Fianna Fáil spokesman on finance, Michael McGrath, says these measures do not go far enough.

“While the debate on the Personal Insolvency Bill will resume in the Oireachtas next month, the system being established will not be a panacea for many people experiencing mortgage distress. The bottom line is that the Government and the banks are failing to provide the leadership required to alleviate the enormous pressure on thousands of families across the country,” said Mr McGrath.

A statement from the Department of Finance said the Government was acutely aware of the difficulties facing households who cannot afford to repay their mortgage and the development and implementation of strategies to deal with this remains a key priority.

“The approach to resolving the mortgage arrears crisis is carefully calibrated to make sure that assistance is targeted at those who cannot pay as opposed to those will not pay. This is absolutely essential so as to minimise the cost to the taxpayer,” said a spokesperson.