Banks failing to tackle mortgage arrears

Three in four home loans in long-term arrears are not being restructured by the banks despite lenders having a range of mortgage solutions to offer borrowers.

The new figures on mortgages come amid warnings that banks are still failing to give loans to customers.

An analysis of home loans from the Department of Finance shows that there were 699,764 mortgages at the end of August. Some 82,624 of these loans had been in arrears of 90 days or more.

The data shows 62,210 of these long-term arrears mortgages were not restructured, while solutions were agreed for just 20,424 loans.

The data from the department reveals the different type of restructuring deals being agreed by banks with struggling mortgage holders.

The department looked at data from six banks — AIB, Bank of Ireland, PTSB, ACC, KBC Ireland, and Ulster Bank — the main lenders operating here who cover around 90% of the mortgages.

Out of the total 699,764 mortgage accounts, 120,754 were in arrears for at least one day. But it is the ones that are over 90 days in arrears which are of greatest concern.

The department said despite just one in four long-term arrears cases being restructured, the analysis showed that banks were “beginning to get their arms around the problem”.

Of the restructured mortgage cases with the banks, the department divided loans into permanent and temporary restructured cases.

The most popular method for borrowers in long-term arrears was an extension of the time on their loan. This was followed by interest- only payment arrangements on loans for borrowers.

Other arrangements for restructured mortgages included fixed repayment schedules, split mortgages and a moratorium on payments in some cases.

Department officials pointed out that the figures did not include any settlements since the Dunne judgment loophole was closed off, which previously prevented lenders from repossessing homes.

The data will be updated on a monthly basis, it said.

Meanwhile, a “major intervention” has been called for to address the mortgage crisis.

The Irish Banking Federation said yesterday that a total of 1,673 mortgages, to the value of €281m, were approved during September. It said this represented a year-on-year increase of just over 10%; although the rate was down by nearly 6% on a monthly basis.

The Professional Insurance Brokers Association was quick to warn that little had changed for the better, five years on from the start of the financial crisis.

“There is no doubt, whatsoever, now that there is an unmet demand for mortgages,” said chief operations officer Rachel Doyle. “And regardless of the number of approvals banks are indicating they are giving, the reality of the situation is they are not materialising into loans to consumers.

“Unless there is a major intervention and the banking crisis gets sorted out in the foreseeable future, it will continue to be a major drag on the hopes and plans of individuals and families but will also stymie recovery in the wider economy,” she added.

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