‘Phoney’ to say 20% in arrears are strategic

Claims that 20% of people in mortgage arrears are strategic defaulters is a “phoney concept”, according to the governor of the Central Bank.

Patrick Honohan claimed the term was too simplistic as he said the reality was people were prioritising short-term debts over mortgage repayments.

And while he pulled back from criticising banks for including letters threatening legal action as “solution offers” to those who had fallen behind with mortgages, he warned that lenders were not acting quickly enough and were guilty of “wishful thinking”.