As problem of long term mortgage arrears gets worse, new solutions needed to stave off repossession

11 April 2018

Stock Image - House Keychain (Mortgages/Housing)

Central Back giving itself a “pat on the back” but thousands still at risk of defaulting

New solutions which seriously tackle the unstainable debt burdens of thousands of Irish mortgage holders must be seriously considered if we are to prevent the possibility of largescale house repossessions, FLAC (Free Legal Advice Centre) has said today.

A new report by the Central Bank suggests that progress has been made in tackling long-term mortgage arrears but also reveals that 28,946 Primary Dwelling House (PDH) loans in Ireland have been in arrears for at least two years.

Of that figure about 12,700 have been in arrears for more than five years. This is a 10% increase on the same figure seen one year previously.

Paul Joyce, FLAC, Senior Policy Analyst said; “The Central Bank seems to be giving itself a pat on the back for the progress it has made on mortgage restructuring.

However, while we welcome any moves to lighten the burden of mortgage holders, FLAC remains extremely concerned for the continuing plight of almost 30,000 people in long term arrears. The fact that there’s been a marked increase in those in arrears of five years or more shows the problem is getting worse not better.”

FLAC, CEO, Eilis Barry said; “As an advocate for households in debt, FLAC has consistently argued that existing debt burdens are not sustainable and that lenders need to consider at least a partial write down in mortgage debt. Other innovative approaches such as mortgage to rent schemes must also be considered.

Currently, there is a genuine risk that thousands of people could lose their homes. Therefore, if the claim made by banks that repossession is the last resort, they need modify their approach, especially to those who have been in arrears for several years.”

As part of its work, FLAC researches, lobbies and advocates for reforms to personal debt legislation and regulations.