More than 23,000 defaulting mortgage holders are facing the prospect of legal action to repossess their homes and investment properties as banks step up efforts to confront the arrears backlog.

New figures from the Central Bank suggest that banks had proposed solutions for 93 per cent of arrears cases by the end of September, exceeding their year-end target to propose solutions in 85 per cent of cases.

In almost half of those cases, however, the proposed solution involves loss of ownership. Davy economist Conall MacCoille described this as an “exceptionally high” rate, adding the final outcome in 23,751 of the cases that have reached the “concluded solution” phase may result in the loss of ownership.

“This is where the bank has adhered to the code of conduct on mortgage arrears and where court proceedings are now being sought to move to repossession,” Mr MacCoille said. The first stage in this process is where the banks in question apply for a court date to move to repossess properties. “Even at this late stage, it may still be possible for uncooperative borrowers to re-engage,” said Mr MacCoille.

“Buy-to-let investors appear to be moving towards repossession at a faster pace, with 57 per cent of concluded buy-to-let solutions compared to just 33 per cent of owner-occupier solutions.

Repossession

“Nonetheless, the 23,751 concluded solutions involving loss of ownership, potentially moving towards repossession, should not be downplayed.

“In total, there were 29,796 residential property transactions in 2013. The total 49,000 delinquent mortgage accounts currently being threatened with repossession represent well over one year’s property market transactions.”

Such figures include uncooperative borrowers who do not engage with banks.

The CentralBank figures show that 60,423 arrears cases had been concluded by the end of September, 56 per cent of the total and ahead of both the 40 per cent target for that period and the 45 per cent year-end target.