PRODUCT PROFILE

Latest Dublin Prices

IMHO rejects home arrears positive spin

Thursday, March 07 16:01:48

The latest mortgage arrears figures for the last three months of 2012 from the Central Bank today confirmed that the crisis around mortgage debt in the State is not stabilising but is instead spinning out of control.

That's according to the Irish Mortgage Holders Association (IMHO) who added that neither the Government, nor the Central Bank are capable of managing the forced deleveraging of the households.

"This crisis was directly caused by the previous Governments neglect of their duty of care to borrowers and homeowners, and it is now exacerbated by the years of Government inaction on dealing with the fallout of the reckless lending perpetrated by the Irish banks in 2001-2007, according to the IMHO.

Today's figures show a further quarterly increase of the 1.74pc in the numbers of mortgages in arrears, relating to private residential mortgage books. At the end of December 2012, 18.2pc of all mortgage accounts were in arrears, with 185,933 mortgages or 24pc of all mortgage accounts now either at a risk of arrears, in arrears or in default.

Taking into account the reclassification of mortgages undertaken by the Central Bank of Ireland, making figures comparable to historical trends, almost 19pc of residential mortgages in the country are currently in arrears, the organisation, who has Dr.Constantin Gurdgiev and David Hall among its directors.

Year on year, mortgages in arrears were up 21.43pc while numbers of mortgages at risk of default or in default (defined as those in arrears, restructured, but not in arrears and currently in repossession) rose to 181,672, representing 23pc of all mortgage accounts.

"The latest data released from the Central Bank of Ireland is also showing significant reclassification of mortgage accounts taken in Q3 and Q4 2012 that strongly distorts both relative percentages and year on year comparatives. Figures for Buy-to-Let mortgages also show marked deterioration in the underlying conditions in the economy. A generation of Irish people is now locked into an endless battle of attrition with the banks. A recent MABS report showed that the mortgages crisis is compounded by the unresolved unsecured debt arrears. On average each family in difficulty with their mortgage also had four other sources of debt. In order for those in debt to return to contributing to the economy we need effective, swift, fair and certain resolution of the household debt crisis."