Thursday 22 June 2017

Up to 6,700 EBS customers are in mortgage arrears

Charlie Weston and Laura Noonan

ALMOST 6,700 homeowners who have a mortgage with the EBS are in arrears, it emerged yesterday.

Arrears at the building society have shot up by almost a quarter in the second three months of this year, and are now higher than the average for other lenders.

Some 6.2pc of the society's homeowner mortgage customers have not been able to make a repayment for a month or more.

The society admitted that arrears were increasing, but insisted they were rising at a slower pace than previously.

For the mortgage market as a whole 4.6pc of homeowners have not been able to pay their mortgage for three months or more, recent figures from the regulator revealed.

When buy-to-let mortgages are included in the EBS arrears figure, some 7,625 mortgages have not been paid for a month or more. And some 4,951 of these are three months or more in arrears. More than half of those in arrears have agreed a repayment deal with the society. EBS, where six out of 10 mortgages are standard variables, has increased the interest rate on its standard variables twice this year.

Mortgage brokers accused the society last night of stoking the mortgage crisis by hiking its lending rate for homeowners.

Pre-tax loss

EBS reported a pre-tax loss of almost €250m for the first six months of the year, but chief executive Fergus Murphy insisted household mortgages were "performing better" than investment mortgages.

Mr Murphy said the "lion's share" of higher profits for the society in future would not come from hiking mortgage rates.

But mortgage adviser Karl Deeter, of Irish Mortgage Brokers, accused the society of pushing people deeper into arrears by increasing lending rates.

Last week an American billionaire trying to gain control of the EBS promised to cut a deal with mortgage holders who are in arrears -- but there would be a sting in the tail.

Potential EBS investor Wilbur Ross said Irish lenders would have to cut the principal amount that people owe on their mortgages.

But any deal to forgive some of the mortgage amount owed by heavily indebted households would come with a large number of conditions, Mr Ross told the Irish Independent.

He admitted that anyone who benefited from a debt write-off deal would be tied into a contract that would mean they would have to split any profit they made in future if they sold their home or if its value rose significantly.

Meanwhile, an association that represents debt advisers warned homeowners yesterday not to stop paying their mortgages in a bid to leave some money to repay unsecured debts like credit card bills and motor loans.

Eugene McDarby, of the Debt Management Association of Ireland, said homeowners were opting to pay interest only on their mortgages in an attempt to free up cash to clear other debts.

Irish Independent

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