THE SCALE OF ARREARS on outstanding mortgages for both principal dwelling houses (PDH) and buy-to-let (BTL) properties increased further in the second quarter of this year.
The total number of homeowners in arrears has quadrupled since 2009 to close to 100,000, according to a Central Bank.
The outstanding balance for home-owners who have been in mortgage arrears over 360 days is €17.3 billion, as recorded at the end June this year.
Increase
This is an increase of more than 5 per cent over the quarter. The Central Bank said:
The emerging trend of rising longer-term arrears continues to be of concern. The latest data also show that less than one quarter of PDHs in arrears over 90 days are part of restructure agreements. While lenders have introduced loan modifications to provide more sustainable solutions, it is still too early to see the impact of these within the data.
The study by economist Jean Goggin said PDH mortgages in arrears of more than 90 days have almost quadrupled since 2009, amounting to €18.6 billion at the end June 2013.
The review finds that the long-term solutions being offered by banks are not working to solve the problem for people in debt.
Half of those who have had their arrears added to the overall mortgage end up back in arrears after some time, he states. And two out of three of those given a permanent interest rate reduction also end up re-defaulting.
Figures from the end of June shows that 76.5 per cent of restructured PDH accounts were deemed to be meeting the terms of the arrangement, implying that these borrowers are, “at a minimum, meeting the agreed monthly repayments according to the restructure arrangement,” said Goggin.
Goggins states that the number of “re-defaults” would imply that the arrangement put in place was not sustainable.
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