FOR THE FIRST time since the Central Bank began taking records four years ago, the number of mortgage accounts in arrears has fallen.
The latest data for the third quarter of 2013 shows that owners of 141,520 principal dwelling houses (PDH) had fallen behind in their home loan payments.
That is a decrease of 1,372 properties and a 0.5 per cent decline on the outstanding balance on all main-home mortgages.
However, the Central Bank warned that the drop masks divergent trends between short-term and longer-term arrears.
Although arrears declined significantly, extremely long-term arrears continued to rise.
The number of accounts in arrears for more than 90 days at the end of September had risen to 99,189. The increase of 1,315 was driven entirely by accounts that are behind by over 720 days. All other maturity categories declined.
The 720-day category now accounts for 22.5 per cent of all accounts in arrears. The value of accounts in arrears of more than 360 days also remains large and currently sits at €12 billion.
Restructuring
The number of PDH accounts in early arrears of less than 90 days declined by six per cent during the third quarter, compared to a decrease of 3.3 per cent in the previous three-month period.
By the end of September, a total of 80,555 accounts were classified as restructured with almost 80 per cent deemed to be meeting the terms of the new arrangements – although this does not necessarily equate to long term, sustainable solutions.
Forbearance techniques have included a switch to interest-only mortgages, a reduction in the payment amount, a temporary deferral of payment, extending the term of the mortgage and capitalising arrears amounts and related interest.
There were also a small number of modification options such as split and trade-down mortgages which were introduced to provide more long-term solutions for customers in difficulty.
A jump in the number of buy-to-let mortgages that have fallen behind in their payments was also attributed to longer-term arrears. The total number in arrears was 40,426 – more than a quarter of total stock – but the category of arrears up to 180 days declined.
Of the 40,426, more than 31,000 were in arrears for more than three months.
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