Friday 6 May 2016

Banks are 'ignoring' long-term arrears cases

Published 03/09/2014 | 02:30

BANKS have been accused of picking off easy arrears cases to deal with and ignoring those who are a year or more behind on their payments.

The charge was made after new figures showed the number of homeowners in long-term arrears has risen.

The increase was despite a fall in the numbers getting into arrears for the first time.

FLAC (Free Legal Advice Centres), the Irish Mortgage Holders Organisation and the Professional Insurance Brokers Association (PIBA) all accused banks of dealing with those who just recently fell into arrears while turning their backs on those who are years behind on payments.

Some 61,000 residential mortgage accounts were in arrears for a year or more by June, according to the Central Bank.

And there has been a rise in the numbers who are two years or more in arrears.

David Hall of the Irish Mortgage Holders Organisation said banks were failing to deal with long-term arrears cases. Photo: David Conachy
David Hall of the Irish Mortgage Holders Organisation said banks were failing to deal with long-term arrears cases. Photo: David Conachy

At the end of June, just over 37,000 mortgage accounts were two years or more behind on repayments, up 28pc in a year.

FLAC's Paul Joyce said those who were two years or more in arrears owe an average of €47,000 in back payments, up €1,200 since March.

He said banks had made 10,000 applications to repossess family homes in the past year.

David Hall of the Irish Mortgage Holders Organisation said: "Banks are failing to deal with the long-term arrears and are only offering solutions to those in early arrears.

"The banks and the Central Bank are engaged in a game, forgetting that there are thousands of families being tortured in the background."

PIBA's Rachel Doyle said banks were "kicking the can down the road" by failing to write off debt for those who would never get their payments back on track.

Karl Deeter of Irish Mortgage Brokers said that the banks needed to consider repossessions of homes which were in long-term difficulties.

"Why are we so determined for people to keep houses while people in the rental sector face higher prices; other people are locked out of housing markets, while some stay in houses that they can't afford to live in," he said.

The bad news on long-term arrears masks an improvement in the numbers who are three months or more behind on their payments - one of the key indicators of arrears.

At the end of June there were 90,343 residential mortgage accounts in arrears for three months or more.

This represented almost 12pc of residential mortgages, but it was the third quarter in a row that this number had declined, the Central Bank said.

Close to 40,000 investor mortgages were in arrears in June, representing about a third of these mortgages.

Irish Independent

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