Mortgage arrears at least two years behind now total €6bn

The Central Bank of Ireland said yesterday that the number of residential mortgages in arrears of two years or more was a source of "serious concern" and that the scale of potential losses on these loans could be "quite significant".

Enhanced quarterly statistics for mortgage arrears, published by the regulator yesterday, show that €6.04 billion of mortgages on private dwelling homes are in arrears of 720 days or more.

The report shows that the level of mortgage arrears in Ireland has almost quadruped since 2009 and totalled €18.6 billion at the end of June this year.

Those in arrears of two years or more now account for one-third of this total.

The Central Bank said this “indicates that the various resolution strategies implemented to date have... had little impact on longer-term arrears”.

Strategies failed

It added that the various resolution strategies for those in arrears of 720 days or more have “either failed to effectively tackle such problem cases or have not been targeted at these particular cases”.

On a more positive note, the report shows that the level of home loans in early arrears has declined.

In addition, the value of mortgage arrears of 91 to 360 days fell by €600 million between September of last year and June 2013. The regulator said this was due to more active management by lenders of their arrears cases.

Reduced payments

The Central Bank’s report shows that between April and June of this year, 23,500 mortgage accounts on private dwelling homes were granted new repayment arrangements.

Reduced payments was the biggest category at 28.5 per cent followed by interest-only at 24.9 per cent.

At the end of June, 76.5 per cent of these restructured accounts were meeting the terms of their new arrangement.

For buy-to-let mortgages, the figure was 77.4 per cent. The value of buy-to-let mortgages in arrears of 90 days or more was €8.7 billion at the end of June.

This was 28.5 per cent of the total outstanding balance of such loans.