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Mortgage crisis eases as numbers in arrears fall


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THE mortgage arrears crisis looks to have peaked as the numbers falling behind on their repayments have dropped for the first time in four years.

Central Bank figures show that there were 96,274 residential mortgage accounts in arrears for three months or more in December.

This represents 12.6pc of residential mortgages but is down slightly from the previous quarter.

It is the first time since September 2009 that the numbers who are three months or more behind on their repayments have dropped.

Economist with specialist bank Investec Philip O'Sullivan said he expects the arrears figures to continue to fall.

Mr O'Sullivan said: "In all, we believe that mortgage arrears statistics should continue to record improvements over the coming quarter."

In a statement, the Central Bank said: "This marks the first decrease in arrears over 90 days since the series began in September 2009."

However, there was a rise in numbers who are in long-term arrears. The rise in the numbers stuck in arrears for two years or more has prompted accusations that banks are cherry-picking the easiest cases when offering repayment solutions.

Some 60,000 residential mortgage accounts have missed payments for a year or more. The average level of arrears on these accounts is €42,000.

Close to 34,000 of these mortgage accounts were in arrears for two years or more, the Central Bank said.

Some 84,000 mortgage accounts have been restructured to lower the repayments, the regulators said.


When those who are in arrears – but for less than three months – are included, the total is 136,564. This is almost 18pc of all residential mortgages, although this figure has fallen for two-quarters in a row now.

David Hall of the Irish Mortgage Holders Organisation said banks were getting the overall figures down by ignoring those who are two years or more in arrears.

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"There is a minor reduction in the numbers of those in short-term arrears. There is, however, a very concerning trend of those in long-term arrears being ignored in favour of banks choosing easier arrears cases to solve."

He said the numbers in long-term arrears were frightening and show urgent and meaningful intervention was required.

Six out of 10 mortgage accounts in arrears are now two years or more behind on the repayments.

Banks have initiated legal proceedings to repossess homes in close to 1,500 cases.

There has been a rise in the number of homeowners offered a split mortgage – this is a way of reducing the monthly repayments by putting some of the mortgage owed to one side and making no, or small repayments, on that portion of the loan.

Some 3,268 split mortgages were given out in the three months up to the end of the year.

Chairman of the Association of Expert Mortgage Advisers Trevor Grant said the increase in long-term arrears was disconcerting and "appears to be unmanaged or unmanageable".

The figures also show that 30,700 buy-to-let mortgages are in arrears for three months or more.

This makes up 21pc of these mortgages.

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