Level of early mortgage arrears down 6% - Central Bank

Thursday 28 November 2013 16.45
Total number of home loans in arrears fell to 141,520 (18.4% of the total housing stock) from 142,892 (18.5%)
Total number of home loans in arrears fell to 141,520 (18.4% of the total housing stock) from 142,892 (18.5%)

The number of Irish mortgages in arrears for more than 90 days increased slightly in the third quarter of the year compared to the previous three months, new Central Bank figures show.

The proportion of residential mortgages in arrears for more than 90 days rose to 12.9% by the end of September, up from 12.7% in the previous three months.

The figures show that buy-to-let arrears grew to 27.3% from 26.9% at the end of June.

But the number of residential accounts in early arrears of less than three months declined "significantly", the bank said. It noted a 6% quarter on quarter fall in the number of mortgages in arrears of less than 90 days. 

This meant that the total number of home loans in arrears fell to 141,520 (18.4% of the total housing stock) from 142,892 (18.5%) three months earlier.

Longer term arrears continued to grow as the number of accounts in arrears over 360 days hit 59,944, which represents 7.8% of the total stock of all primary homes. Accounts in arrears of over 720 days now constitute 22.5% of all accounts in arrears.

The outstanding balance on all principal dwelling houses fell by 0.5% during the three months from July to September, the first decrease since September 2009, the Central Bank said.

A total stock of 80,555 mortgages were categorised as restructured at the end of September, reflecting an increase of 1.5% at the end of June. Of these 53.4% were not in arrears and almost 80% were meeting the terms of their new agreements. 

The Central Bank has increased pressure on banks, requiring them to conclude sustainable agreements with 15% of customers in arrears over 90 days by the end of this year, rising to 25% by next March. It said 23,776 new restructuring deals were agreed during the quarter.

The share of interest only arrangements and reduced payment arrangements (interest plus some capital) fell again in the third quarter, to 41.4% from 49.7%, which the Central Bank said signalled a move from short term arrangements. 

Arrears capitalisations and term extension arrangements rose in the three month period, and accounted for 20% and 19.2% of total restructures by the end of September. 

Today's figures from the Central Bank also show that legal proceedings were started against the mortgage holders of 1,830 principal dwelling houses. Court proceedings were concluded in 361 cases in the three month period, with the courts granting an order for repossession or sale of the property in 89 of these cases.

Meanwhile, the finance minister has said he thinks the problem of mortgage arrears is stabilising.  

Michael Noonan said the implementation of the insolvency legislation coupled with the the reduction in number of residential accounts in early arrears give cause to optimism.
  
He said while banks are finally getting on top of the issue, "we're not quite at the tipping point yet". He said he expects significant progress to be made in the coming months.

The minister also said despite the new figures "a lot of families are still in difficulty".