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More than 60,000 homeowners fall 90 days behind on repayments

THE number of homeowners who are three months or more behind on their mortgage repayments has jumped to 60,000.

Ratings agency Moody's released statistics yesterday showing 7.62pc of the home loans that have been sold off to investors are now 90 days or more in arrears.

If this figure is applied across the entire 782,427 mortgages in the market, it means just short of 60,000 homeowners are now three or more months behind on their repayments.

Figures from the Central Bank last month put the number of homeowners in arrears in the three months to March at just shy of 50,000, or 6.3pc of all mortgages.

Now Moody's has produced figures for April showing the percentage in arrears has gone up from 6.65pc in February.

This means an additional 8,000 mortgage holders fell behind on their payments between February and April.

However, the Central Bank pointed out that the number of repossessions remained low at just 140 in the first three months of this year, while the majority of people were managing to repay their mortgages.

Moody's said the numbers in arrears for a year or more had also jumped.

There are 18,621 homeowners who are a year or more behind on their repayments. People who are a year or more behind on their repayments are at risk of losing their homes.


The Central Bank has told lenders to wait a year before taking legal action to repossess a house when a homeowner falls into arrears and fails to engage with the lender.

A research note from Moody's said it regarded mortgage accounts that were 360 days in arrears as a proxy for defaults.

And it said the outlook for residential mortgages was negative. This was due to rising unemployment, which was pushing borrowers into arrears.

"Irish unemployment rates will increase to 14.4pc in 2011 from 13.5pc in 2010," Moody's said.

"Falling house prices will increase the size of losses on defaulted mortgages. House prices have already fallen by 40pc between September 2007 and March 2011."

However, the agency took heart from the fact that an auction of distressed residential properties in April saw prices that were 60pc below the peak of the housing market.

"Although the sale underlines the severity of the housing market correction, we also see this as an indication of genuine demand from buyers for the first time in over four years and a potential floor in house prices," Moody's said.

Lenders were told last week by the Central Bank to have new rules in place for dealing with people in arrears by the end of this month.

Irish Independent