Irish republic: rise in arrears

The number of people in the Republic falling into arrears on their mortgage payments has jumped by a quarter as the downturn deepens...

Almost 14,000 people are now struggling to meet their monthly repayments Financial Regulator figures show.

The majority of people with a mortgage arrears problem - someone who has not paid a mortgage for three months - owe the money to banks.

But almost 1,000 people have run up mortgage arrears with subprime lenders who usually only provide homeloans to people who cannot get loan approval from mainstream banks. Subprime lenders typically charge around two per cent more for mortgages than prime lenders.

Figures gathered from 24 mortgage lenders by the Financial Regulator show that 13,931 mortgage accounts were three months in arrears by June this summer.

This was up from 11,252 at the end of December 2006, a rise of 24per cent over that period.

But Colette Drinan of the Financial Regulator stressed that the numbers of people struggling to pay their mortgages was low. She said the 13,931 people in arrears represented 1.44 per cent of residential mortgages. The survey also reveals 112 residential properties were repossessed between January 2005 and June 2008.

Of these, 16 were repossessed by subprime lenders.

There is no breakdown on repossession actions taking in the courts, only cases which actually resulted in a repossession of a home.

And the figures do not capture voluntary repossession where homeowners hand the keys back to the bank, often staying in the home and renting it from the lender.

Source: Belfast Telegraph