Shock as new figures show surge in homeowners unable to pay their mortgages
Published 13/12/2012 | 11:15
THERE has been a sharp rise in the numbers of people unable to pay their mortgages.
An additional 5,111 mortgage holders ended up three months or more behind on their repayments up to September, new figures issued by the Central Bank this morning show.
This takes the overall number who are in some form of arrears on their residential mortgages or who have had to strike a deal with their bank to lower monthly repayments is close to 180,000.
And the figures show that almost 20,000 of these homeowners are two years or more behind on the repayments. Experts said these people were at serious risk of losing their homes.
The shocking new figures are set to renew demands on banks to do deals, like writing off some debts, for homeowners who are hopelessly behind on their repayments.
And some 67,400 mortgage accounts have built up six months of arrears.
Large numbers of those in serious arrears are likely to attempt to come to arrangements with their banks under new personal insolvency arrangements, due to become law soon.
This would allow them to agree to new lower repayments over a five-year period. At the end of this, if the homeowner keeps to the deal they may get debt written off.
A further 26,770 investor mortgages are three months or more in arrears.
Noeline Blackwell, director general of the Free Legal Advice Centres (Flac), said arrears levels have increased over the 13 reports.
"The arrears crisis continues to be serious but is not unexpected.
"No durable, long-term solutions have been put in place. Lenders continue to adopt a sticking-plaster approach to the problem," she said.
Flac also pointed to the 19,541 households in arrears for two years or more and on average owe arrears of more than €40,000.
The report was published as Justice Minister Alan Shatter rejected suggestions that repossession levels would surge as the Government is committed to reforming laws in the area amid demands from the bailout Troika.
A loophole which bars banks from repossessing homes in some circumstances is to be closed.
David Hall and economist Dr Constantin Gurdgiev, of the Irish Mortgage Holders Association, said the crisis was out of control.
"A generation of Irish people are now locked into an endless battle of attrition with the banks," they said.
"It must be internationally unprecedented for a Taoiseach, Tanaiste, the Governor of the Central Bank and head of banking regulation all to state their dissatisfaction with how banks are dealing with mortgage holders, while at the same time not acting to deliver real policy solutions and changes.
"This government is now fully paralysed by the crisis. Leadership is now required to ensure we do not lose a generation to over-indebtedness."
In terms of repossessions, at the beginning of September banks held 944 repossessed homes on their books.
The report showed that 79 court orders were granted to allow houses to be repossessed in the third quarter.
It also said that 154 properties were repossessed by lenders in the three months to the end of September - 47 following a court order and 107 voluntarily surrendered or abandoned.
"This property tax will push many ordinary families over the edge and should be abandoned before it is too late," he said.