Business Property & Mortgages

Sunday 31 August 2014

Banks 'turning blind eye' over numbers in long-term arrears

Charlie Weston Personal Finance Editor

Published 06/06/2014 | 02:30

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David Hall complains that Permanent TSB is using high-pressure tactics to strike deals and force people to tap family members for cash
David Hall complains that Permanent TSB is using high-pressure tactics to strike deals and force people to tap family members for cash

A RISE in the number of homeowners who are two years or more in arrears on their mortgages has prompted concerns that banks are ignoring problem home loans.

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The increase in the long-term arrears took the gloss off the fact that there has been another fall in the overall number of homeowners who are behind on their mortgage repayments.

There are now 93,100 residential mortgage accounts that are three months or more in arrears, according to figures for the first three months of the year from the Central Bank.

When those who are in arrears for less than three months are added in, the total comes to 132,217 for the first three months of this year. This works out at 17pc of all residential mortgage accounts.

The latest figures mark three quarters in a row of falling arrears, the Central Bank said.

However, the figures for January, February and March show 35,314 mortgage accounts now in arrears for two years – up from 33,589. Some €7.4bn, or 68pc of all the arrears owed, is represented by those who are two years behind.

David Hall of the Irish Mortgage Holders' Organisation accused banks of not dealing with homeowners in long-term arrears.

"The banks are cherry-picking the easy arrears cases to offer solutions, so they can meet their targets. They are not dealing with the long-term cases."

The average amount of arrears for those who are two years behind in payments is €46,000, up almost €5,000 since the end of last year, according to legal rights body FLAC.

Some 92,000 mortgage accounts have been restructured to lower payments for over-stretched borrowers.

There has also been a rise in buy-to-let mortgages in arrears, which now stand at close to 40,000 out of a total of 145,000.

Repossessed

Banks issued just over 3,000 legal proceedings against homeowners in the first three months of the year, double the amount in the previous three months.

Some 281 properties were repossessed or voluntarily surrendered by banks in the first three months of the year. Lenders now hold 1,116 residential properties that have been repossessed, the Central Bank said. Just 143 were sold during the quarter.

Banks hold 502 buy-to-let properties that were repossessed or handed back, up 73 in the quarter. Just 42 were sold by banks during the quarter.

According to the figures, split mortgages were agreed with an extra 5,000 homeowners. The number of splits now totals close to 8,400, or one in 10 of all restructures agreed.

A split mortgage is where part of the loan is put to one side, with no repayments made on the principal for a period, in an attempt to lower the monthly repayments.

Irish Independent

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