Monday 16 July 2018

40,000 home loans are in arrears over three months

Charlie Weston Personal Finance Editor

AS MANY as 40,000 home loans could now fall into the non-performing category, a much higher figure than previously reported.

The Financial Regulator said just before Christmas that 26,271 homeowners were in arrears for 90 days or more.

But KBC Homeloans, the mortgage division of KBC Bank Ireland, said yesterday that 4.9pc of its residential mortgage customers were in arrears for that period.

If KBC's arrears experience is applied across the market, it means 40,000 mortgage holders have not paid their mortgage for three months or more, figures calculated by the Irish Independent show.

Chief executive of the lender John Reynolds said yesterday he had no reason to believe that its mortgage book was any different to other lenders in terms of arrears.


There are some 791,000 residential mortgages outstanding, according to the Financial Regulator's figures.

Of those, 3.3pc, or 26,271 mortgages, were in arrears of 90 days or more in December.

Updated figures from the regulator are due out at the end of March. These are expected to show that the numbers of home loans in arrears of three months or more have shot up to around 40,000, if these calculations prove correct.

This newspaper reported last week that as many as 30,000 mortgage holders have succeeded in getting their lenders to allow them to restructure their mortgages in a bid to make repayments more manageable.

And at the end of last week struggling mortgage holders were thrown a lifeline when banks, building societies and sub-prime lenders were ordered to wait a year before moving to repossess a home from those who are in arrears.

The move will come as a blow to sub-prime lenders such as Start, which features in many of the repossession cases now before the courts.

Up to now, most lenders had to wait for only six months after the borrower got into arrears before taking legal action to repossess a home.

Both AIB and Bank of Ireland, which received e3.5bn each under the State's bailout plan, were told last February to wait a year before moving on homeowners who were in arrears.

But the regulator has now ordered that all lenders will have to do the same as part of an amendment to the statutory Code of Conduct on Mortgage Arrears.

Irish Independent

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