Mortgage arrears cases still problem

Well over half of the country’s most distressed mortgages will end up in the hands of so-called non-bank firms if the planned home loan sales go ahead, leading legal and debt adviser Paul Joyce has said.

The latest figures from the Central Bank show the number of accounts in arrears for over two years, a category which captures the most distressed loans, was little changed at almost 28,000 at the end of September. The number of early-term arrears representing missed payments up to 90 days fell in the latest quarter, the figures show.

Mr Joyce, senior policy analyst at the Free Legal Aid Centres said mortgage arrears in Ireland was a problem of longterm arrears, with 28,000 of the 45,178 cases in arrears for over 90 days in arrears by over two years.

“Bit by bit, the less serious arrears cases are diminishing but the two-year arrears category doesn’t seem to be budging to any great extent It is a significant number of households and the question is where are they going in the long run,” he said.

The latest survey does not include the high-profile announcements and proposed loan sales by Permanent TSB, Ulster Bank, and other lenders.

However, Mr Joyce said the vast majority of an up to an estimated 14,000 loans under the sales planned by Irish banks will likely be in longterm arrears.

He said nearly 30% of the longterm arrears are in the hands of retail credit firms and unregulated loan owners already. And with up to 13,000 accounts in the sales pipeline, “there will be well over half of longterm arrears and the most vulnerable loans controlled” by non-banks, Mr Joyce said.

About 13% of all 113,871 restructured loans have failed to meet their new terms, according to the latest figures. The figures suggest almost 20% of the 37,762 restructured by means of arrears capitalisation have failed to meet their new agreements and almost 7% of the 27,339 restructured split mortgages have failed to keep up with new payments.

Given the number of cases he estimates before the courts, Mr Joyce said that repossessions remain low.

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