More than 14,000 in mortgage arrears could lose their homes

Forty-four per cent of loans in long-term arrears over five years past due date

The owners of more than 14,000 homes that are in long-term arrears in Ireland could lose their properties, according to the Central Bank.

Some 28,046 private dwelling homes were in mortgage arrears as of last December and the Central Bank has said that more than half of those cases were “classified as involving the potential for loss of ownership outcomes”.

Based on figures from the Central Statistics Office, which note that there are an average of 2.75 people per household in Ireland, some 38,500 people could be directly affected by this.

Since the middle of 2009, 8,195 owner-occupied properties have either been voluntarily surrendered by the mortgage holders or have been repossessed by the lender, due to the borrowers’ inability to keep up with mortgage payments.


An article by Sharon Donnery, a deputy governor in the Central Bank, has highlighted that almost 120,000 mortgages for private dwelling homes have been restructured since the financial crash in 2008.

The co-authored article, released as part of the Central Bank’s quarterly bulletin, highlights how 44 per cent of loans in long-term arrears – which means 720 days or more – are more than five years past their due date.

At the end of 2016, almost four in 10 borrowers in long-term arrears had not engaged with their lender.

“Durable restructures have been the prominent method for non-performing loan (NPL) mortgage resolution in Ireland. However, whilst the amount of late-stage arrears cases is decreasing, a significant number of cases remain, and appear to be getting worse,” Ms Donnery said.

“The financial crisis brought great hardship to many people, but the engagement of borrowers is essential for this issue to be effectively tackled.”


The article, Resolving Non-performing Loans in Ireland, identifies continuing vulnerabilities for borrowers including economic shocks, interest rate rises, the durability of restructurings and the ability of borrowers to sustain payments over long-duration restructurings.

A loan is classified as non-performing when repayments are more than 90 days past due, or the debtor is assessed as “unlikely to pay” in full.

The accumulation of NPLs on banks balance sheets tends to result from a highly leveraged banking sector, the article notes, highlighting the speculative nature of lending in Ireland, in particular for commercial real-estate projects.

Issues from the most recent financial crisis appear to be having a lasting effect with recent research indicating that the majority of personal dwelling-home mortgages flowing into arrears in 2016 either had a history of modification or previous default experience, the Central Bank’s research states.

However, work to tackle NPLs appear to be paying off to some extent and the volume on Irish banks balance sheets has fallen from over €80 billion in 2013 to €30 billion last year.

While positive, the Central Bank flags that NPLs remain an important issue and a major source of economic vulnerability. “Resolving them is in everybody’s interest,” the article said.

Separately, David Hall, a co-founder and director of both the Irish Mortgage Holders’ Organisation and debt-resolution group iCare Housing, has reached agreement with AIB to review a sample size of mortgages to establish whether iCare can buy them as opposed to the bank selling the mortgages to a so-called vulture fund.

“My view is that AIB are 100 per cent committed to not selling homes to vulture funds,” he said, suggesting that about 2,000 of the bank’s NPL holders were not engaging on restructuring proposals at present.

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business