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Government accused of abandoning families in deep mortgage arrears


David Hall (right)

David Hall (right)

David Hall (right)

Banks, regulators and the Government have been accused of abandoning people who are in long-term mortgage arrears.

The claim came after new figures showed the numbers who are more than two years behind on their mortgage repayments have continued to rise.

This is despite a fall in the overall number of homeowners behind on their mortgage.

Figures from the Central Bank show that the number who are more than two years behind on their repayments rose to close to 38,000 in December. These people are classed as being in long-term arrears.

They are at risk of having their homes repossessed because they have not made payments for so long that they will likely find it difficult to get back on track even if they return to employment, experts said.

The Central Bank said the numbers who are more than three months behind on their repayments fell below 80,000 in the period up to last December.

It was the fifth three-month period of falling arrears over 90 days.

Almost 115,000 residential mortgage accounts have been restructured, with split mortgages and arrears capitalisation, where the unpaid amount is added to the overall mortgage, the most popular restructures. The number of residential mortgage accounts in some form of arrears was more than 110,000.

A total of 429 properties were taken into possession by banks to the end of December. This meant lenders had 1,588 former homes in their possession.

David Hall of the Irish Mortgage Holders Organisation, said: "There is nothing to celebrate here.

"The numbers of families who are more than two years behind on their mortgage repayments have risen again. These people have been abandoned by the banks, the Government and the Central Bank."

Minister for Finance Michael Noonan yesterday said the Government is willing to "tweak" insolvency legislation in an effort to get more people to engage with banks.

When asked if the banks have become too aggressive, Mr Noonan insisted the Government is watching the situation "very carefully".

"We are also watching the way the insolvency legislation is being applied and if it needs tweaking to improve the uptake we will tweak it," he said.

"We are very conscious of the issue and it's the policy of the Government not to have homes repossessed," he insisted.

The Labour parliamentary party has backed plans to reduce the bankruptcy period to one year, down from three.

This is seen as a way to force banks to do State-approved insolvency deals with people in serious mortgage distress.

Karl Deeter of Irish Mortgage Brokers has suggested a modification of this to a one-year bankruptcy, allowed only for family homes where an insolvency practitioner puts forward a proposal that is vetoed by the bank.

Fianna Fáil Finance spokesperson Michael McGrath said the increase in long-term arrears was a damning indictment of the Government's strategy on distressed mortgages.

Irish Independent