IBF worried over rise in mortgage arrears

IBF worried over rise in mortgage arrears

The latest Central Bank figures showing an increasing in the number of mortgages in arrears is worrying, according to the Irish Banking Federation (IBF).

The increase to 97,874 (12.7pc) in the number of accounts in arrears of over 90 days unfortunately reflects further deterioration in the financial circumstances of those already in or falling into arrears. This deterioration is particularly evident in longer-term arrears of over 180 days. The overall level of arrears is likely to increase further before it finally peaks, the IBF said.

“It is encouraging that the rate at which people are falling into arrears (less than 90 days) continues to fall – down 3.3pc on the previous quarter, amounting to a decline of 10pc since the peak in Q3 2012. The reduction for the third consecutive quarter in 91-180 days is also encouraging.”

The number of distressed customers being offered longer-term, sustainable resolutions can be expected to increase over the coming months, it said.

“However, it is important to note that the transition from short-term forbearance to longer-term sustainable resolutions takes time to conclude: detailed assessment of each case is central as is the borrower’s consideration of the resolution proposed. It is also important to bear in mind that the framework enabling effective action by lenders to resolve mortgage arrears has just very recently been put in place in the form of the revised customer contact provisions of the Code of Conduct on Mortgage Arrears and the measure to address the lacuna in respect of repossessions created by the Justice Dunne judgement.”

“IBF member banks are extremely mindful of the impact of the resolution process on individual borrowers and their families. The complexity and scale of the challenge of mortgage arrears resolution is great. Notwithstanding this, banks continue to work assiduously with their distressed customers to maximise the number of sustainable mortgages and to deal effectively with unsustainable mortgages; and they are working closely with the Central Bank in delivering such solutions within the framework of the mortgage arrears resolution targets.”

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