The number of homes in mortgage arrears fell marginally in the first quarter of the year following two consecutive quarters of increases, according to data from the Central Bank.
The regulator’s report shows there were 703,308 private residential mortgage accounts for principal dwellings – or homes – held in the Republic at the end of March, with a value of just over €101 billion.
Of these, 47,620 accounts were in arrears, which was a decrease of 114, or 0.24 per cent, over the quarter. This was driven primarily by a decrease in the number of accounts in arrears for less than one year.
The number of homes in arrears over 90 days was 28,769 at the end of March, which represented 4.1 per cent of all private dwelling accounts. The figure was nearly unchanged since the end of December.
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In March, 40 per cent of private home accounts in arrears were held by banks, whereas 60 per cent were held by non-banks entities. This compares to 46 per cent held by banks and 54 per cent by non-banks in March, 2023.
In annual terms, the number of private home accounts in arrears over 90 days fell by 2 per cent, primarily driven by a reduction in the number of accounts in arrears between two and five years.
The number of accounts in arrears of less than 90 days increased slightly, up just under 1 per cent over the quarter, but down 3 per cent from March, 2023.
Of the private home accounts in arrears, 11 per cent are currently part of a legal process, 32 per cent of which have been in the legal system for over five years.
At the end of March, non-bank entities held 17 per cent of all private home mortgages outstanding and 84 per cent of all private home accounts in arrears over one year.
A total of 29 private homes were taken into possession by lenders in the quarter. Fifteen of these were repossessed on foot of a court order, while another 14 were voluntarily surrendered or abandoned.
During the quarter, 24 properties were disposed of by lenders. As a result, lenders were in possession of 144 private home properties at the end of the period.
A review by the Central Bank, published in April, found lenders are often failing to adequately engage with borrowers experiencing early mortgage arrears.
The regulator carried out analysis of how lenders are dealing with borrowers in financial difficulties amid a pickup in short-term arrears, particularly among borrowers with nonbank lenders or so-called vulture funds, which typically charge higher rates of interest on loans.
Overall the review found the mortgage arrears resolution framework set out in the Central Bank’s code of conduct was “well positioned to support borrowers in or facing financial difficulty”.
“However, the review also found that the quality of customer service is not yet where it needs to be in the context of the specific challenges for borrowers facing early arrears at this time,” the Central Bank said.
In particular it highlighted instances where there was “inadequate follow-up with borrowers which did not progress engagement or took lengthy periods of time”.
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