Long-term home loan arrears are worst in the EU
The number of households in long-term mortgage arrears in this country is the highest in Europe, ratings agency Moody's says in a new report.
And it found that banks are restructuring investor mortgages more quickly than those of householders.
Moody's said that high levels of late-stage arrears indicated that the country's mortgage arrears crisis was far from over.
This is despite a persistent fall in the overall number of people in some form of arrears.
Just over 38,000 residential mortgage accounts were more than two years behind on the repayments in June, according to the Central Bank. This is almost 1,000 more cases than the same period last year.
Arrears cases of more than two years now represent 54pc of the total in arrears over 90 days.
Moody's said the restructuring of buy-to-let mortgages had outpaced that of owner-occupier loans.
This was due to the weaker credit position of buy-to-let borrowers and because they are more willing to reach a restructuring arrangement in order to avoid the appointment of a rent receiver.
It said that debt write-offs were rare as most banks had a policy of avoiding writing off debt. Where debt is written off, this is under strict circumstances, limiting moral hazard among borrowers.
In the report, Moody's analyst Gaby Trinkaus said: "With the level of late-stage arrears still the highest in Europe, the expanded use of restructuring should help curb losses as the economy continues to pick up steam."
This was despite the fact that the courts looked favourably on mortgage holders in trouble, he said. "With borrower-friendly courts allowing repossession only after all attempts to engage with a borrower have failed, it can take up to four years to repossess and sell a property in Ireland," he said.
But the ratings agency expects arrears and losses to decline during the next year on the back of the economic recovery.
Both the Insolvency Service and the State's Money Advice and Budgeting Service (MABS) have begun approaching borrowers facing repossession in the courts to inform them of options under insolvency.
Judges can adjourn cases where homeowners indicate they want to consult a personal insolvency practitioner about securing a deal with bank.
Next month, the Government is due to sign a commencement order which will dilute the veto banks have in insolvency deals, something that has been seen as a major stumbling block.