Seven in 10 residential mortgage holders behind on their repayments are in long-term arrears — a third of which are grappling with a payment backlog of two years or more.
Despite the latest Department of Finance mortgage arrears figures showing a slight improvement in the number of borrowers in arrears, the scale of the crisis is strikingly evident.
At the end of February, the number of primary dwelling mortgage accounts in arrears stood at 84,717 — an improvement of 3,100 compared to the previous month.
More than 30,200 residential mortgage accounts are mired in arrears of 90 to 720 days with a further 28,930 more than 720 days behind their repayment schedule, however.
The combined total of borrowers accounted for in these two categories translates to just shy of 70% of all residential mortgages in arrears. The situation is reflective of the impending tsunami of repossessions that may materialise with 8,000 such cases before the courts. While many of these cases may not result in repossessions, the number of borrowers before the courts is cause for concern.
The mortgage issue has come into sharper focus as of late with variable rates charged by the country’s main lenders coming in for severe criticism from opposition TDs and advocacy groups while government-supported arrears solutions have also been described as ineffectual.
Finance minister Michael Noonan said earlier this month that he would ask the Central Bank governor Patrick Honohan to bring his influence to bear on trying to convince the banks to lower the rates charged on standard variable rate mortgages. The Central Bank is compiling research on the issue which is expected to highlight the disparity between rates in the Irish market and those in other European countries which are up to €3,300 a year cheaper — but appear reluctant to intervene directly.
The Government which cannot set rates also appears limited in the influence it can exert over the banks.
Stakeholders are still searching for solutions to the arrears crisis too with the Irish Mortgage Holders Organisation suggesting last week that local authorities could pay part of the a borrower’s mortgage in some circumstances.
Existing solutions such as the Government’s mortgage-to-rent scheme, have seen disappointing results to date. However, the number of restructured mortgage accounts stood at 106,400 at the end of February, The number of mortgages in arrears of more than 90 days not restructured has fallen to 41,550 from 42,510.
Of the permanent restructuring arrangements, arrears capitalisation is the most oft-used with more than 28,000 while more than 21,700 split mortgages have been initiated.
Just 2,000 interest-only mortgages have been agreed while more than 16,000 term extensions have been finalised. Interest-only mortgage products are the most popular temporary arrangements, however.
The number of buy-to-let mortgages in arrears at the end of February reduced by 530 against the previous month’s figures and stood at 28,603. There was a fall of 303 in the number of accounts in arrears of greater than 90 days, which stood at 23,520 at end February 2015.
Some 5,915 restructures were in arrears of greater than 90 days compared to 6,045 the previous month.
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