Household debt crisis easing as mortgage arrears fall

February 17, 2016

Noonan stops short of declaring turning point

– 29 November 2013

MORTGAGE arrears figures indicate that the household debt crisis may be beginning to ease.


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There has been a rise in those more than three months behind on their payments, but experts said it was significant that fewer mortgages were going into arrears for the first time.

There was also a slight decline in the overall total number of residential mortgage accounts in arrears — dropping from 142,900 in June to 141,500 at the end of September.

The total number of mortgages in some form of arrears now represents one in five of the total.

The new figures show: l A continuing rise in the number of mortgages that are three months or more in arrears to 99,200.

* A rise to 59,944 in the mortgages that are a year or more behind on repayments.

* A fall in the numbers getting into arrears for the first time to 43,200.

* Some 80,555 mortgages were restructured at the end of September, an increase of 1.5pc at the end of June.

There has also been a rise in the number of buy-to-let accounts in arrears.

One in three of these accounts, or 31,200, were three months or more behind on their payments.

Finance Minister Michael Noonan stopped short of declaring a turning point in the mortgage arrears crisis.

He said: “I think it has stabilised and over the next number of months you will see very significant progress.”

Karl Deeter of Irish Mortgage Brokers said banks were telling people with investment properties to use the rent to pay the mortgage on the home, and allow the investment property fall into arrears.

This was especially where the home mortgage was with a different bank to the one that funded the buy-to-let.

Economist with Goodbody Stockbrokers Dermot O’Leary said the figures were bad, but the situation was easing off.

The improving economy, particularly in the labour market, was putting a lid on the arrears mess.

“The problem now is the stock of distressed loans rather than the flow of mortgages going into distress, but obviously there is a large stock that financial institutions will have to work through and restructure,” said Mr O’Leary.

Banks were quick to claim credit for a fall in the overall number of mortgage accounts for the first time in four years.


Irish Banking Federation’s Felix O’Regan said banks were making a greater effort to restructure accounts for householders behind on their payments.

However, the Central Bank figures show that a quarter of the 80,555 mortgage accounts that were restructured were put on interest-only payments.

This is up just 1.5pc from the summer period. Tanaiste Eamon Gilmore said banks were working hard to offer sustainable solutions to help struggling borrowers get back on their feet.

“Clearly, those who are in longer-term arrears are in a difficult situation,” he said.

“It’s going to take a greater degree of effort for those arrears problems to be resolved, but we are making progress on it,” Mr Gilmore said.

David Hall of the Irish Mortgage Holders Organisation described the figures as “abysmal”.

“There has been a complete failure to do anything for those in long-term arrears,” he said.

Fianna Fail‘s Michael McGrath said the Government’s mortgage arrears resolution targets programme has made the situation worse.

The banks’ response has been to step up legal proceedings with over 13,000 threats of repossession issued since the targets were set, he said.

Irish Independent


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Originally posted 2013-11-29 07:01:39.

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