herald

Wednesday 16 August 2017

Almost 100,000 now in mortgage arrears

THE number of homeowners unable to pay their mortgage is continuing to rise despite banks being ordered to deal with the crisis.

Close to 100,000 mortgage holders are now three months or more behind on their payments. This is despite six lenders being told by the Central Bank that they will be penalised if they do not tackle the rapidly rising arrears problem.

New figures for the three months to June are set to show that about 98,000 residential mortgage accounts are now three months or more in arrears. The figures rose for the 16 quarters since the Central Bank began capturing data in September 2009.

Close to 13pc of the entire stock of residential mortgages is now 90 days or more in arrears.

There had been expectations among financial experts that the arrears figure would begin to taper off after specific targets were set for banks to deal with the problem this year.

AIB, Bank of Ireland, Ulster Bank, KBC Bank, Permanent TSB and ACC Bank were ordered to have offered 20pc of their customers who are in arrears a long-term solution by the end of June. The fact that there is no let-up in the rise in arrears is set to be a massive disappointment to the Government and regulators, as the mortgage crisis is seen as one of the main policy issues at the moment.

Power

The need to tackle the crisis is constantly demanded by the bailout troika – the International Monetary Fund, European Central Bank and the European Union.

The inability of banks to get to grips with it comes after controversial comments from AIB boss David Duffy this month, when he claimed that one in five of those in arrears on the bank's books were strategically defaulting.

The AIB boss did not produce any evidence for this claim and he was heavily criticised for it by mortgage-support groups.

Mortgage expert Karl Deeter said it would take another six months for the level of arrears to fall back. He accused the banks of not making serious efforts to tackle the issue.

"Arrears are going to continue to rise," he said.

"A lack of sustainable restructures, a refusal to negotiate sincerely and regulation which has only recently allowed them to get back to genuine collections are all contributing factors."

He said that even if banks start offering realistic restructures to those whose income has fallen so much that they can no longer meet the originally agreed payments, it will be well into next year before the problem eases.

Banks have claimed they have met the initial arrears targets set by regulators.

hnews@herald.ie

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