Figures show major rise in mortgage arrears

New figures show a major increase in the number of mortgages in arrears last year.

More than 44,000 homeowners are at least three months behind with their mortgage repayments.

Figures from the Central Bank show that the number of householders unable to keep up with their monthly repayments increased by 10% in the final few months of 2010.

According to the data, 106 homes were repossessed in the last quarter – taking the total number since records began in July 2009 to 422.

The September-December rate of repossessions is the highest in the 18 months since the Central Bank started detailing the extent of the arrears crisis.

The figures also reveal a 41% increase in the number of lenders asking the courts to take action against debt-hit homeowners.

Banks, building societies and other mortgage providers took legal action in 297 cases. The report revealed that homes linked to these cases were in arrears to the tune of €9.8m.

Official mortgage arrears data supplied by the main banks and compiled by the Central Bank showed:

:: 44,508 mortgages (5.7% of all mortgages), valued at a total €8.6bn, were more than 90 days behind payments.

:: 31,938 are 180 days behind.

:: Banks allowed 59,229 households to restructure their debts.

:: 521 repossessed homes are still held by the banks.

:: 35,205 mortgages have been restructured and are classed as performing and not in arrears.

The report, the sixth since the mortgage arrears data was first recorded, found that banks have helped homeowners to restructure 59,229 loans.

It said 38% are now classed as interest only and 28% are on reduced payments.

The Irish Bankers’ Federation said: “The difficult economic circumstances in which some borrowers find themselves today has, not surprisingly, given rise to an increase to 5.7% (of all mortgage accounts) in the level of arrears of 90 days or more.

“While the vast majority of borrowers continue to meet their mortgage repayments, it is important that those borrowers in or facing difficulties are assisted in every reasonable way possible.”

The Free Legal Advice Centre (Flac) called for stronger measures to address the mortgage arrears problem.

Fine Gael, now the largest party, said it would create a five-year window to allow homeowners to pay two-thirds of the mortgage if that is all they can afford.

They would also allow people in debt to dip into their pension fund to pay off some of the mortgage and give more relief for people who bought at the height of the boom.

Labour said it would ban repossessions for two years and shift some money away from rent allowance to help those most at risk of repossession.

Noeline Blackwell, Flac’s director general, said: “We were encouraged that all political parties addressed this urgent need in some way in their manifestos.

“Given the increasing number of home mortgages in trouble and the serious levels of personal over-indebtedness in Ireland, the Government must act quickly to implement reform.”

Paul Joyce, senior policy researcher, said: “The steady climb in the number of residential mortgages in arrears – up 16,000 in 2010 – continues a trend already apparent to Flac in 2009.

“These figures show not only the need for diligent adherence by lenders to the revised Code of Conduct on Mortgage Arrears, but also the need to develop and implement stronger measures to actually address the mortgage arrears problem and indebtedness in Ireland generally.”

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