Mortgages in arrears of over 90 days fall

Figures from the Department of Finance show that the number of mortgages in arrears of more than 90 days has declined to just under 79,500.

The figures show a rise in the number of mortgages classified as permanently restructured up to nearly 54,000, up 2,781 since December.

However, David Hall of the Irish Mortgage Holders’ Association questioned the validity of a huge number of those restructured loans where the banks had used either term extension or arrears capitalisation.

“Mortgage capitalisation seems to be the cure of choice, accounting for a large percentage of restructured mortgages. This is only a solution if the reason that the home owner got into arrears has been resolved,” he said

“In fact, mortgage capitalisation results in higher repayments for many homeowners as it simply involves the arrears being added to the existing mortgage and it being classified as permanently restructured,” he said

“I am greatly concerned that they are using this sticking plaster approach. There is no guarantee or evidence that the underlying issues have been resolved,” Mr Hall said.

The department noted a rise in the number of split mortgages, from 2,521 in August when it began measuring the mortgage arrears crisis, to 7,131 by the end of January.

Mr Hall said that not all split mortgages are good news, with Bank of Ireland requiring that people pay interest on the parked portion of the mortgage and Permanent TSB requiring that people sell their home to clear the parked tranche of the mortgage.

In the buy-to-let sector, there was a marked rise in the number of rent receivers appointed by the banks. The banks had put 542 more rent receivers in place bringing the total appointed to 3,721.

The restructuring in the buy-to-let sector is considerably behind the residential sector with just 10,532 mortgages restructured.