Long-term mortgage arrears a greater concern than ever
5 June 2014
The Central Bank has today issued its report to 31 March 2014 on mortgage arrears, repossessions and re-structures on family homes. This shows an overall small decrease in the total number of principal dwelling houses in arrears (down from 136,564 to 132,217 – from 17.9% to 17.3% of the total the total number of mortgages).
However FLAC’s Director General Noeline Blackwell said that FLAC’s main concern and focus was on the increase in the number of long term arrears cases. She said ‘It is particularly worrying that accounts in arrears over 2 years continues to increase and now stands at 35,314 accounts – a 5% increase on the position at the end of 2013. For these accounts, the average amount of the arrears has risen from approximately €41,650 to €46,100.’
There has also been a striking increase in the number of repossession applications in the first quarter of 2014. In the first half of 2013, there were 525 new applications to repossess family homes. In the second half of 2013, thanks to a less restrictive regime for lenders, new applications rose to 3,321. However already in the first three months of 2014 alone there have been 3,093 new applications. If applications continue at that rate, over 12,000 proceedings against family homes will have been filed.
The total number of restructured accounts has risen by about 8,000. However, the number of accounts in arrears that have been restructured has only increased from 38,416 to 38,862 – 450 approximately. This figure is consistent with the figures issued by the Dept. of Finance in May 2014 on the Mortgage Arrears Resolution Targets which showed that by the end of March 2014, only a quarter of the accounts in arrears over 90 days of the 6 main lenders had been restructured – and that the number of restructured accounts had in fact marginally decreased since the end of 2013.
According to FLAC’s Senior Policy Analyst Paul Joyce: ‘There is clear evidence of people continuing to transit from short term into long term arrears. The failure to make significant progress on restructuring long term arrears cases, when set against the dramatic rise in repossession applications, is a real concern. It means that the difficult cases that remain unresolved are growing and the solutions for keeping people in their family homes are reducing.’
- FLAC (Free Legal Advice Centres) is a human rights organisation which exists to promote equal access to justice for all. FLAC is an NGO that relies on a combination of statutory funding, contributions from the legal professions and donations from individuals and grant-making foundations to support its work.
- FLAC offers basic legal information through its telephone information line (1890 350 250) and free legal advice through its network of 80 volunteer evening advice centres. It also campaigns on a range of issues including personal debt, fairness in social welfare law, public interest law and civil legal aid.
- Central Bank of Ireland Residential Mortgage Arrears and Repossessions Statistics: Q1 2014: http://www.centralbank.ie/press-area/press-releases/Pages/ResidentialMortgageArrearsandRepossessionsStatisticsQ12014.aspx
- The Department of Finance monthly figures on mortgage restructures data published on 16 May 2014 can be accessed at http://www.finance.gov.ie/sites/default/files/Mortgage%20Restructures%20Data%20-%20end%20March%202013.pdf