Mortgage Arrears/Personal Debt Group-Final Report
The final report from the Mortgage Arrears and Personal Debt Group are out and you can access the full reprt here:
http://www.finance.gov.ie/documents/publications/reports/2010/mortgagearrrepfin.pdf
Among the key findings/reccomendations:
- Mortgage arrears data from the Central Bank at the end of Jine 2010 show that 36,438 residential mortgage accounts, representing 4.6% of the total number of accounts, are in arrears for over 90 days. This compares with 3.3% at the end of September 2009.
- Forthcoming data from the Central Bank is expected to show that 5% of all Mortgage accounts are in arrears for over 90 days.
- The group estimates, based on the Central Bank's quarterly data on Mortgage arrears and the lenders survey, that around 90% of Mortgage accoounts are being repaid in accordance with the contract. Two thirds of rescheduled mortgage accounts are paying at least full interest.
- We do not reccommend a formal debt forgiveness scheme having regard to the broad range of policy considerations which are outlined in the main body of the report.
- The DIS should enable borrowers who can pay at least 66% of their mortgage interest (but less than the full interest) to defer payment of the unpaid interest for up to 5 years.
- The Department of the Environment, Heritage and Local Government should swiftly implement new regulations (currently being developed) which will enable borrowers whose mortgage has been deemed unsustainable, to become eligible for social housing assessment before a repossesion order has been made or repossesion has actually taken place.
- The group notes that, for some mortgage holders who are in negative equity, trading down would produce a reduction in Mortgage debt and more affordable monthly payments. The group reccommends that further consideration should be given by lenders to facilitating trading down by borrowers in this situation. Such options would have to meet relevant prudential standards, with appropriate controls in place, and be in the customers' best interest.