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Concern that banks are only tackling "easy" mortgage arrears cases

The new figures show that 168 properties were taken into possession by lenders in the last quarter of 2013.

Image: Mortgage via Shutterstock

THE NUMBER OF mortgage accounts for principal homes in arrears fell for the second consecutive quarter in the final quarter of 2013.

There was also the first decrease in arrears of over 90 days since September 2009, the new figures from the Central Bank show.

The outstanding balance on primary home mortgage accounts in arrears of more than 90 days was €18.2 billion at the end of last year.

Repossession

There were 1,012 properties in the banks’ possession at the beginning of the final quarter in 2013.

During the quarter, 168 properties were taken into possession by lenders, 63 of which were repossessed under a court order, and 105 of which were voluntarily surrendered.

The figures also show:

  • At the end of that quarter, there were 33,589 mortgage accounts with arrears of greater than 720 days, meaning outstanding balances of €6.9 billion. These accounts represented almost 63 per cent of outstanding arrears on homes at the end of last December.
  • Mortgage accounts for principal dwelling houses of over 90 days at the end of December 2013 decreased by 2.3 per cent over the quarter, which represents the first such decline since 2009.
  • The number of buy-to-let mortgages in arrears fell from 40,396 (27.4 per cent) to 39,250 (27 per cent) in the fourth quarter of 2013.
  • There were 12,218 (8.4 per cent) residential mortgage accounts for buy-to-let properties in arrears of over 720 days at the end of December last year, up from 7.9 per cent at the end of September in the same year.
  • The outstanding balance on these accounts at the end of December 2013 was €3.9 billion.

Investigation

The Irish Mortgage Holders Organisation has said that the new figures show that “there needs to be an urgent investigation by the Central Bank of what banks are classifying as long-term sustainable”.

The IMHO said that the use of arrears capitalisation in 22 per cent of “restructures” along with 11.6 per cent in an “other” category means that “serious questions must be asked”.

The IMHO noted that while there is a reduction in the numbers of those in short term arrears, it alleged there is “a very concerning trend of those in long term arrears being ignored in favour of banks choosing easier arrears cases to solve”.

Of those whose arrears were capitalised, it says the fact that 41.2 per cent have re-defaulted “clearly shows the concern is merited”.

The IMHO described the numbers in long term arrears as “frightening” and showing that “urgent and meaningful intervention is required”.

Meanwhile, Sinn Féin Finance Spokesperson Pearse Doherty TD described the figures as “proof of three years of complete failure by Fine Gael/Labour in tacking the mortgage crisis”.

Read: Mortgage holders group join with KBC to offer arrears advice service>

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