Flac: Average long-term mortgage arrears are €77,000

By Eamon Quinn

The only solution to the country’s deep-seated mortgages arrears problem is for banks to write off debt for households who have faced long-term distress, the country’s leading debt advocate has said, as new figures showed the banks were making slow progress in resolving the home loans crisis.

Paul Joyce, senior policy adviser at the Free Legal Advice Centres (Flac), said the average amount owed by households behind in their home loan payments for over two years was €77,000 in installments alone.

And it was “impossible” to expect any household to pay off arrears of €77,000 —which represent multiples of the Irish average salary —and then expect them to pay down the capital too, he told the Irish Examiner.

He thought it unlikely banks anywhere else in the world would turn their backs on debt write-offs in the face of such a crisis.

He was speaking after Central Bank figures showed the overall number of mortgage accounts in arrears had fallen to 70,488 toward the end of last year, down over 2,000 from the previous quarter. 

That means 10% of all home mortgages are still in arrears, 10 years after the onset of the financial crisis.

Accounts in arrears of up to 90 days increased slightly in late 2017 because of changes in ways the figures are collected, the Central Bank said. 

The number of accounts in arrears between 361 and 720 days also rose, while the number of accounts in arrears over 720 days fell by almost 2,680.

The overall value of all arrears on all mortgages in distress was at over €2.51bn at the end of 2017, down from €2.76bn in the previous quarter, while the outstanding mortgages on those accounts stood at almost €12.82bn, down from almost €13.32bn.

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