The Government has been accused of dragging its feet over the mortgage debt crisis as figures released by the Central Bank today showed the number of homeowners in financial distress reached record levels in the last quarter.
The data reveals more than 9 per cent of home loans had fallen behind by 90 days or more at the end of December - which accounts for 70,911 mortgages.
A total of 100,700 of the State's 770,000 residential mortgages are in arrears or have been restructured.
The numbers of homes in arrears is up by almost 8,000 compared to the end of September last year.
The figures show that 74,379 residential mortgage accounts had been restructured compared to 69,735 at the end of September. More than 36,797 householders are keeping up with the restructured arrangements, but 37,582 are experiencing some form of arrears.
Arrangements whereby at least the interest only portion of the mortgage is being met account for just over half of all restructure types.
Responding to the figures, Fianna Fáil accused the Government of lacking a decisive strategy. Finance spokesman Michael McGrath also claimed the picture was even worse than Central Bank statistics showed.
Citing information released to the Oireachtas finance committee, he claimed the number of mortgages experiencing some level of distress is likely to be closer to one in five.
“The Keane report on mortgage arrears was presented to the Government on 28 September 2011. In the four-and-a-half-month period since, and despite repeated promises, the Government has refused to give its formal response to the Keane report and to lay out its overall strategy for dealing with the mortgage arrears crisis," Mr McGrath said.
“The Government’s approach to the mortgage arrears crisis has been characterised by inaction and indifference. The most worrying aspect of today’s figures is that the arrears crisis shows no signs of letting up."
The Fianna Fáil TD called on the Minister for Finance to make a Dáil statement outlining which recommendations of the Keane report will be implemented.
Sinn Féin's Pearse Doherty said Government inaction was hurting families.
“People in mortgage distress want to see an end to Government complacency. They do not want more expert reports or pilot schemes," the finance spokesman said. “They want the Government to put pressure on banks to reach sustainable agreements with their struggling mortgage customers.”
Mr Doherty called for negotiated debt write downs to enable people to stay in their family homes. “Anything short of this will see hundreds of more families fall into serious mortgage distress."
The New Beginning group said mortgage problems continued to worsen and also criticised the lack of a strategy to deal with them.
"The real concern remains the almost complete absence of medium and long term solutions to this huge social and economic problem," a statement said. "It is to be hoped that the new personal insolvency legislation . . . will begin a process where society can finally begin to address the crisis."
The lobby group for mortgage holders in arrears said this would entail lenders "recognising their culpability and being willing to take their fair share of the pain".
The Free Legal Aid Centre’s Paul Joyce said three-quarters of the mortgages labelled as troubled have now been in arrears for six months or more. He stressed the new personal insolvency scheme would have to deal effectively with mortgage debt.
“Currently, the draft scheme of legislation largely depends on the goodwill of lenders to work. It will be very important that a person’s entire indebtedness is dealt with in the scheme and that creditors, whether secured or unsecured, should not be allowed to veto reasonable repayment plans.”
Ciaran Phelan of the Irish Brokers' Association expressed concern at the speed at which the numbers in long-terms arrears was growing. “The record growth in long-term arrears is probably the most alarming statistic in the latest data,” he said.
He accused banks of waiting for homeowners to fall into arrears before agreeing to any form of restructuring. “This would not appear to be in the homeowners’ best interest,” he warned.
The figures released today also showed banks repossessed 133 properties during the quarter, 83 of which were voluntarily surrendered or abandoned. The remaining were repossessed by way of court orders.
The total number of properties taken into possession in the last quarter dropped by 18 per cent with 29 fewer properties being seized compared to the previous quarter.
During the quarter, legal proceedings taken in 95 cases comprising arrears totalling €13.9 million on loans equating to €37.8 million. Some 187 court proceedings were concluded last quarter, of which the Courts granted orders for possession or sale in 109 cases.
Some 118 properties were disposed of in the quarter, meaning the banks held 895 properties at the end of December 2011.
The Central Bank said the number of mortgages also continued to fall in the three months to the end of December with 768,917 private residential mortgages held in the State, totalling €113.5 billion. This compares with 794,609 held at the end of September 2009.
The Irish Banking Federation claimed its members were “employing a range of measures to deal with distressed borrowers and said they were continuing “to examine what further initiatives can be introduced in the context of the Report of the Interdepartmental Group on Mortgage Arrears (Keane Report)”.
It encouraged borrowers under pressure with repayments “to communicate with their lenders in order to find a workable arrangement that will assist in the management of their financial difficulties”.
Those comments were echoed by Bernard Sheridan, director of consumer protection at the Central Bank. He said it was important for consumers struggling with mortgage repayments to make contact with their lender as early as possible.
“It is important that borrowers co-operate fully with their lenders in order to be able to avail of the protections under the Central Bank’s revised Code of Conduct on Mortgage Arrears,” he said.
