27/05/2010

Mortage Arrears Cripple 32,000 Homes

Figures published today show there are over 32,000 households that have fallen into mortgage arrears for over 90 days.

The figures come from the Financial Regulator who today published data on mortgage arrears and repossessions showing at end March 2010 that out of 791,000 private residential mortgage accounts in Ireland, 32,321 were in arrears for more than 90 days. The data also shows that overall mortgage debt outstanding for private residential mortgages decreased by over €285 million in the first quarter of 2010.

The figures show that mortgage accounts in arrears for more than 90 days increased by 13% since the end of December 2009.

Fine Gael Housing Spokesman, Terence Flanagan said the figures disputed the Government's claims today that Ireland had "turned the corner", as mortgage arrears figures for the first quarter in 2010 confirm an increase of 4,000 more homeowners in arrears compared to the previous quarter.

TD Flanagan said: “This is the biggest legacy of the financial crisis according to the Financial Regulator yet the Government has done precisely nothing to address it.

“I agree with the Financial Regulator's assessment yesterday that ‘there is no silver bullet solution’ to solve the mortgage arrears situation. However, the Government and its recently formed working group on consumer indebtedness are dragging their heels on this issue and should have solutions by now. Some of their recommendations could include:

Mr Flanagan said the Government needed better negotiations between banks and homeowners to take court cases regarding mortgage arrears and repossessions out of the courts system.

He also suggested the Government took a look at the shared ownership model which applies to first time buyers and which could be extended to some homeowners who find themselves in mortgage difficulties.

“I genuinely fear the numbers that will be reported for quarter two will be even higher as unemployment redundancy payments run out and households encounter difficulty in even paying interest only on their mortgages.”

There was also little evidence of sympathy for those struggling to repay with the regulator revealing that mortgage lenders had applied to Court to commence proceedings in 161 of the cases - In these 161 cases arrears totalling €5.9 million had built up on mortgage loans totalling €59.2 million.

At the beginning of the quarter mortgage lenders held a stock of 397 repossessed residential properties. A further 91 were repossessed during the quarter of which 26 were repossessed on foot of Court Orders and 65 were repossessed following voluntary surrender or abandonment. A total of 32 properties were disposed of during the quarter.

This left mortgage lenders with 456 repossessed residential properties at the end of March 2010.

(DW/BMcC)

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