Legal rights group concerned by mortgage arrears figures

Legal rights group FLAC (Free Legal Advice Centres) has raised concerns over mortgage arrears figures released by the Central Bank.

The group said the data confirms that worrying trends continue where family homes are in mortgage arrears. Over 5,000 homes have been repossessed over the last four years.

Paul Joyce, senior policy analyst at FLAC, said: “With the Quarter 4 figures for 2016, we now have four full years of data on repossession in Ireland.

“Since 2013, a total of 28,917 new repossession cases have been brought, and 5,306 family homes have been repossessed through court orders or by voluntary surrender during this time.

“We also know that a substantial number of cases have been struck out or withdrawn but it is worrying that there is no figure provided for the number of repossession cases currently before Circuit Courts. What is clear is that many such cases have been in the system for some time and the households involved are at serious risk of repossession. FLAC believes that this information is necessary to understand the scale of the issue facing such households and should be made available.”

While overall arrears continue to fall, FLAC is concerned that there is limited progress in tackling longer term arrears cases. The number of accounts in arrears for over two years has decreased from 34,551 to 33,447, but the average arrears amount on these accounts increased from €63,611 to €65,895 over the last quarter of 2016.

Vulture funds are also increasing their share of impaired mortgage accounts, particularly those which are in deep, longer-term arrears. Vulture funds now own over 15 per cent of the accounts in arrears over two years, up from 11 per cent in the previous quarter.

Mr Joyce said: “The rate of failure in restructures is another worrying trend. Almost 1,400 split mortgage arrangements are failing to meet the terms of the arrangement, and the failure rate for capitalisation of arrears is 22.5 per cent, almost a quarter.

“This indicates that unrealistic restructuring arrangements are being made, with most lenders continuing to avoid the write-down of the mortgage to a sustainable level.

“FLAC believes lenders must consider all available restructuring options, including mortgage write-down where appropriate, if the aim is to keep as many people in their homes as possible.”