PLANS to solve the mortgage crisis won't work, a new report warns.
It comes as the Government's attempts to deal with the mess received a separate blow with the announcement that financial regulator and Central Bank deputy governor Matthew Elderfield is to step down in six months' time.
The report from the Money Advice and Budgeting Service (MABS) finds the typical struggling homeowner in arrears is older than many experts previously thought, casting doubt on the official split mortgage plan to tackle the crisis.
It finds that the majority of people in mortgage distress are aged between 41 and 65.
Experts said this was a new and explosive revelation and contradicted perceived wisdom that most of those in arrears are in their 30s.
Regulators and the Department of Finance are hoping that most of the almost 100,000 distressed borrowers will be offered split mortgages.
This is where the mortgage is divided, with repayments made on the main part of the mortgage and the other part "parked" and dealt with later.
But the report on mortgage arrears, a copy of which has been seen by the Irish Independent, casts serious doubts on whether this will work.
The report, commissioned by the Department of Social Protection, examines almost 6,000 mortgage arrears cases dealt with by MABS offices.
Most of those who go to MABS because of mortgage difficulties are at an age when they should be nearing the end of their mortgage. However, they topped up their home loans during the boom, which has left them deep in debt.
According to the report, solutions "such as debt warehousing/split mortgages will not provide relief to many MABS clients in mortgage difficulty".
Instead, banks would be better off taking the mortgage and other debt together and writing down a portion of it to a level the borrower can afford to pay.
The report also finds it is taking banks two months to reply to distressed borrowers with offers to deal with their situation. It calls for the Central Bank to take action to deal with the delays.
Lenders are also criticised for offering arrangements to borrowers that they have no hope of meeting. This is because the repayments are set too high.
The banks are accused of offering solutions to those in arrears which focus on the mortgage debt only and ignore other borrowings.
Finance Minister Michael Noonan and Mr Elderfield last month told six banks to meet targets for the number of mortgages that are more than 90 days in arrears, forcing them to make offers that last more than a few months.
At least half of those with residential and buy-to-let mortgages at AIB/EBS, Bank of Ireland/ICS, Ulster Bank, Permanent TSB, KBC Bank and ACC will have an offer of a long-term restructuring.
The report finds that 16pc of its clients in mortgage trouble owe between €20,000 and €30,000 in secondary debts.
And 19pc owe more than €50,000 on credit cards, personal loans and credit union loans, according to the state-funded MABS which operates through 63 offices around the country.
'MABS Clients and Mortgage Arrears', by Collette Bennett, is due to be published in a few days.