Noonan 'disappointed' with inaction on mortgages

Updated: Friday, 08 Mar 2013 11:11

Minister for Finance Michael Noonan has expressed disappointment that the banks have not dealt more promptly with the mortgage arrears crisis, saying they were given the wherewithal to do it.

On RTÉ's Prime Time programme, Mr Noonan said the banks had been recapitalised, were now behaving like normal banks and were lending again.

He said the banks must deal with residual debt but had no legal basis for doing so until the insolvency bill was introduced.

The Minister was speaking after figures from the Central Bank today show that 12 out of every 100 mortgages are now in arrears of more than three months.

More than 94,000 private mortgages are in arrears, which is just under 12% of all mortgages, compared with 11.5% last October.

However, the Central Bank said the rate of increase in mortgage arrears is at its lowest level since 2009.

Mr Noonan said said the Government was committed to accelerating settlements with mortgage holders.

"They have been in constant contact over recent weeks with the Central Bank... which is bringing forward a timeline against which they will operate.

“We are committed and we are going to accelerate the level of settlements with people", Mr Noonan said.

The Central Bank has said that the outstanding balance on residential mortgage arrears of over 90 days stood at €17.5 billion at the end of December.

The Central Bank released detailed figures for problem loans of investors for the first time late last year and said today that the proportion of buy-to-let mortgages in arrears rose to 18.9% from 17.9% at the end of September.

A total of 28,421 buy-to-let mortgages were in arrears of over 90 days by the end of the year compared to 27,018 at the end of September.

Today's Central Bank figures show that a total of 79,852 residential property mortgages were restructured by the end of the year, down 2.2% (almost 1,800 mortgages) at the end of September.

The bank noted that the number of permanent restructure deals - which include term extension, arrears capitalisation, permanent interest rate reductions, split mortgages and trade down mortgages - increased by about 13% in the fourth quarter compared to the third.

Of these restructured mortgages, 42,031 were not in arrears, while the remaining 37,821 were in arrears of ''varying length''.

Meanwhile, the Secretary General of the Department of Finance, John Moran, has told the Public Accounts Committee there is an "unnaturally low level of repossessions" of houses in Ireland.

He said the forbearance measures by the banks that resulted in this low rate of repossessions were necessary until a range of measures - notably the personal insolvency legislation - were in place to address the arrears situation.

Pressed by Deputy Shane Ross on whether he expected an upsurge in repossessions, Mr Moran noted the repossession rate in Ireland was 0.25% compared with 3% in the UK.

The Committee was also told today by Department of Finance officials that the Budget will be announced no later than October 15.

The rate of increase in arrears of over 180 days also slowed to 5.4% in the final three months of last year.

But the bank noted an increase in the number of arrears over 720 days, which rose by 14.1% in the fourth quarter from the third quarter - a sign of how deep the problem is for those who bought houses before the property crash.

The bank said that outstanding balance on residential mortgage arrears of over 90 days stood at €17.5 billion at the end of December.

The Central Bank released detailed figures for problem loans of investors for the first time late last year and said today that the proportion of buy-to-let mortgages in arrears rose to 18.9% from 17.9% at the end of September.

A total of 28,421 buy-to-let mortgages were in arrears of over 90 days by the end of the year compared to 27,018 at the end of September.

Today's Central Bank figures show that a total of 79,852 residential property mortgages were restructured by the end of the year, down 2.2% (almost 1,800 mortgages) at the end of September.

The bank noted that the number of permanent restructure deals - which include term extension, arrears capitalisation, permanent interest rate reductions, split mortgages and trade down mortgages - increased by about 13% in the fourth quarter compared to the third.