Mortgage arrears figures for end of 2009 continue to cause worry

3 March 2010

Legal rights organisation FLAC today warned that information from the Financial Regulator on mortgage arrears for the last quarter of 2009 continues the upward trend in serious mortgage arrears since the last figures were issued for the previous quarter.

Out of all residential mortgage accounts in the country, as of December 2009 3.6% are more than 3 months in arrears, which is a 9% increase in three months. More worryingly, there is an increase in the number of mortgages in arrears of 6 months or more, up 8% from 17,767 to 19,185 mortgage accounts. "The disturbing issue is that the number of people in arrears continues to rise, despite interest rates remaining relatively low," said Paul Joyce, FLAC's Senior Policy Researcher.

"There is an increase of about 12% in the number of formal demands from lenders for repossession of people's homes, rising from 4565 to over 5000," continued Mr Joyce. "However, there is a 50% decrease in the number of cases newly introduced to the courts, which may suggest that lenders are exercising their discretion to not bring cases to court."

The figures show that one out of every two people being sued for repossession is now renegotiating their mortgage terms - as opposed to one in four for the previous quarter.

However Mr Joyce commented that "While it is welcome to have this information, we should be cautious in drawing conclusions on this basis, as really it is only the second set of data we can use for comparative purposes. We need a lot more information and more details - does this information includes every loan that is secured on the principal private residence of the borrower, such as for example local authority housing loans?"


Editors' notes:

  1. FLAC (Free Legal Advice Centres) is an independent human rights organisation dedicated to the realisation of equal access to justice for all. It campaigns through advocacy, strategic litigation and authoritative analysis to contribute to the eradication of social and economic exclusion.
  2. FLAC issued this press release in response to new statistics issued by the Financial Regulator on Residential Mortgage Arrears and Repossessions on 3 March 2010. The Financial Regulator's information can be accessed online.
  3. You can read more about FLAC's work on debt law reform on FLAC's website.
  4. The Law Reform Commission published its consultation paper on Personal Debt Management and Debt Enforcement in September (see also FLAC comment)
  5. FLAC recommended a complete overhaul of debt enforcement procedures in Ireland and the introduction of debt settlement legislation in a major report in 2003. That was followed in July 2009 by a second in-depth report which explored the debtor's perspective on the enforcement process. The organisation called for a greater range of remedies to assist those who are over-indebted. You can read about FLAC's open letter to politicians calling for action on mortgage arrears from October 2009.