Government scheme enabled 80% of borrowers in arrears to stay living in home

Abhaile services include financial and legal analysis and advice, accountancy support, insolvency advice, identification and negotiation of mortgage debt solutions and support in court in repossession hearings. Picture: iStock

Four out of five households who availed of the Government’s mortgage arrears support service have remained living in their homes, figures show.

A new report shows that at the end of last year, 80% of households which faced losing their homes due to arrears had managed to stay in their properties as a result of their engagement with the State-funded Mortgage Arrears Resolution Service known as Abhaile, down from 82% at the end of 2019.

The majority of affected households have been in arrears in excess of two years.

The report also reveals that 1,733 new borrowers availed of Abhaile services for the first time last year.

Overall, a total of 20,865 households with long-term mortgage arrears have engaged with Abhaile since it was established in July 2016.

One third of those either have a negotiated solution in place or are trialling one, with the majority either having a personal insolvency arrangement or informal solution in place.

A total of 219 parties had agreed to enter bankruptcy.

Another 47% of borrowers – more than 9,750 households – remain in their homes while they work with Abhaile financial advisers to put a solution in place.

Some 17% are no longer engaging with Abhaile services.

No solution could be found in 3% of cases, which led to 543 households either voluntarily surrendering their home or having it repossessed.

Abhaile services are provided from a number of State agencies including the Insolvency Service of Ireland, the Money Advice and Budgeting Service, the Legal Aid Board, and the Citizens Information Board.

Support services

They include financial and legal analysis and advice, accountancy support, insolvency advice, identification and negotiation of mortgage debt solutions and support in court in repossession hearings.

The services are funded jointly by the Department of Justice and Department of Social Protection with the Government committing to resource Abhaile services up to the end of 2022.

Expenditure on Abhaile up to the end of last year amounted to €28.8m, with another €15.9m due to be spent up to the end of next year.

Options available for resolving mortgage arrears including restructuring the repayment arrangement, personal insolvency, bankruptcy, or sale or surrender of the home.

The figures show the number of home mortgage accounts in the Republic in some level of arrears at the end of last year was 54,986 – a decrease of 9% or 5,610 on 2019.

It represented a 61.5% decrease from the peak of almost 143,000 in June 2013.

The number of accounts in arrears in excess of two years was 24,981 at the end of 2020 – down 34% from a peak of over 38,000 in June 2015.

More than 70% of borrowers who avail of the dedicated mortgage arrears advice service provided by Abhaile are aged 41-65.