‘Cliff-edge’ fears for 37,000 as mortgage holidays end
THE six-month mortgage holiday afforded tens of thousands of borrowers during the Covid pandemic is finally coming to an end.
The Government is now banking on bespoke deals being arranged for tens of thousands people who have availed of the mortgage scheme.
Ministers moved to play down warnings of a “cliff-edge” situation amid pressure to extend the scheme.
Some 37,000 mortgage accounts are benefiting from a payment break.
Meanwhile, there has been an increase of 10,801 Pandemic Unemployment Payment claimants this week. Some 10,035 of the additional claims come from Dublin and reflect the thousands of businesses that were closed as a result of the county being moved to Level 3 restrictions.
THOUSANDS of mortgage holders have built up more than a decade of missed payments.
New figures show that just over 4,700 mortgage accounts were more than 10 years in arrears in June.
The account holders could now be making some payments, but they have still managed to accumulate more than 120 months of missed payments.
And close to 12,000 residential mortgage accounts have the equivalent of between five and 10 years in arrears on their home-loan accounts, according to the Central Bank.
Close to 9,600 were overdue by between two and five years, a new breakdown of the length of time those who are behind on their payments shows.
The revelation of how long some home-loan holders are behind is set to prompt calls for a speeding up of the process of dealing with those unable to pay.
Critics of the slow pace of court repossessions argue the period of time it takes to deal with a mortgage in default means some are living in homes rent-free. Others argue that families cannot be evicted when social housing is in such short supply.
The Central Bank data also shows the time mortgages in arrears have been moving through the court system.
Most of those where a formal demand has been issued are in the legal system for two years.
Court
Some 2,595 accounts in arrears are now more than five years in the court system.
However, for the majority of those in arrears no formal demand has been issued by their lender.
David Hall of the Irish Mortgage Holders Organisation said the figures indicate thousands of families will lose their homes.
The Central Bank figures also show there was a marginal fall in the numbers of residential mortgage accounts that are two years or more in arrears to 26,228.
With some 44pc of these accounts there was co-operation between the borrower and lender, but the mortgages had yet to be restructured.
Payment breaks offered by banks since March meant there was a fall-off in the numbers in short-term arrears.
In a research paper written by Central Bank economists it was found lenders have been too inclined to put in place short-term repayment arrangements for mortgage holders in financial distress.
These include temporary interest-only periods.
The research found some lenders have over-relied on short-term solutions which have led to even higher levels of arrears.
Deputy Central Bank governor Ed Sibley said: “Recognising problems and finding the most appropriate treatment for borrowers who cannot return to their repayment schedule after a six-month break is likely to lead to better outcomes for more borrowers than pretending that the problems do not exist.”