Mortgage arrears figures are not a true reflection of those in difficulty

Ireland’s largest housing association is concerned that the latest mortgage arrears and repossessions figures released by the Financial Regulator today may not reveal the true number of families struggling to repay their mortgage. Respond! Housing Association fears there are another 30,000 families in mortgage difficulty and are calling on all banks to provide more detailed information on their mortgage loans to the Financial Regulator.

According to Respond! Housing spokesperson Aoife Walsh the 28,603 homeowners currently in arrears is only the tip of the iceberg and does not reflect the real number of families in difficulty.
“According to the Irish Banking Federation (which represents banks and financial institutions), 30,000 mortgage holders have switched to interest only mortgages or renegotiated their mortgage terms because of financial difficulty or loss of income. Respond! Housing Association believes this fact is not reflected in today’s figures and we are concerned that when interest rates increase, so too will the struggle and stress facing families on a daily basis. A very large portion of these mortgage holders are already on the brink of default. The smallest interest rate increase by banks or the European Central Bank, or any further reduction in income, will push them over the edge into mortgage default and possible legal action in 12 months time.”

Respond! Housing Association is calling for banks to provide more detailed information on a monthly basis to the Financial Regulator. The housing charity contends this is critical if the Expert Group on Indebtedness formed last week is to carry out its role to the best of its ability.

“The formation of the Expert Group last week is a welcomed development but they will need accurate, up-to-date information in order to report to the Minister for Finance and the Government” added Walsh. “Currently the Financial Regulator only seeks information on arrears and repossessions every quarter but we would like the scope expanded so that all banks must also report on types of mortgages and levels of negative equity faced by homeowners every month. It is very difficult to find a solution to mortgage arrears and negative equity if we are not aware of the true extent of the problem.”

Respond! Housing Association would also welcome the opportunity to participate in any way with the work of the Expert Group. With more than 28 years experience in housing, the charity feels they could make a positive contribution.