Mortgage arrears continue to rise

Mortgage arrears continue to rise

Mortgage arrears are continuing to rise

Almost one in five mortgage holders are in financial difficulty with their loans, according to new figures published by the Central Bank today, which show a rise in arrears.

The figures include for the first time mortgages on buy-to-let properties, where borrowers have missed repayments for more than 90 days.

The percentage of mortgages in arrears of 90 days or more increased to 11.3 per cent or 86,146 of the 761,954 private residential mortgages in the country, during the three months ended September, compared with 10.6 per cent or 81,035 mortgages at the end of June. Some 67,401 accounts were in arrears of more than 180 days at the end of September.

The number of early arrears cases also increased during the third quarter of 2012, reversing the trend of the previous two quarters. The figures show that 49,482 private residential mortgage accounts were in arrears of less than 90 days at the end of September, reflecting a quarter-on-quarter increase of 4.9 per cent.

Figures on buy-to-let (BTL) properties, published for the first time today by the Central Bank, indicate that 26,770 (17.9 per cent) of BTL accounts were in arrears of more than 90 days as at the end of September.

By value, the amount of mortgage debt in arrears of 90 days or more totalled €16.8 billion or 15.1 per cent of the €111.2 billion owing on Irish residential mortgages, while the outstanding balance on buy-to-let mortgage accounts in arrears of more than 90 days was €7.9 billion at end-September, equivalent to 25.5 per cent of the total outstanding balance on all BTL mortgages.

A total of 81,683 private residential mortgage accounts were categorised as restructured at end-September 2012, according to the figures. Nearly half of these were in arrears of varying lengths.

The restructuring of mortgages involves the switching to an interest-only mortgage, a reduction in the payment amount, a temporary deferral of payment, an extension to the term of the mortgage or capitalising arrears amounts and related interest.

The number of properties in possession decreased to 944 by the beginning of the third quarter. The Central Bank said legal proceedings were issued to enforce on debt or security on a mortgage in 466 cases during the third quarter of the year, up from 345 cases the previous quarter.

Court proceedings concluded in 119 cases during the period and in 79 of these cases the courts granted orders for possession or sale of the property.

Minister for Justice Alan Shatter yesterday said the Government was aware of “the real and significant difficulties some mortgage holders are facing” and was committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty.

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