One in 24 unable to make mortgage repayments
Central Bank figures reveal that just over 32,000 of 791,000 mortgage holders, or 4% of all home loans, are in arrears for more than three months – a 13% rise on the last quarter of 2009.
The figures also reveal 21,817 mortgages are six months overdue.
Ireland’s largest housing charity, the Respond Housing Association, claimed the true figure of borrowers in trouble is twice as big. Spokeswoman Aoife Walsh said the figures ignore households which cannot meet payments, but were lucky enough to strike deals with their lenders.
“These figures are only the tip of the iceberg,” she said. “Tens of thousands have been forced to revert to interest-only mortgages, extend the term of their mortgage or in some cases take a payment holiday. These cases are not being highlighted by our banks so, in reality, 70,000 homeowners could be in danger of default.”
Respond said banks are not obliged to report the level of deal-making with struggling clients to the Financial Regulator or Central Bank.
The news comes as the registrar of credit unions, James O’Brien, says that they are seeing a sharp rise in arrears levels in the sector overall and a “significant increase” in the levels of loans being rescheduled as more and more members come under financial stress. He said the stresses caused by loans not being repaid on time had risen dramatically.
This week Financial Regulator Matthew Elderfield said mortgage arrears may be the “legacy” of a crisis that almost caused the collapse of Ireland’s banking system and there is no “silver bullet” for the problem.
Despite the rise in mortgage arrears, the amount of court actions taken against borrowers in difficulty dropped by almost 5% over the first three months.
Lenders had 456 repossessed homes on their books at the end of March; 91 homes were taken from borrowers in the first three months of the year; and 32 were disposed of by mortgage lenders.
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