The EU today issued a stark warning to the Irish Government that it was not satisfied with the growth in residential mortgage arrears. Arrears are where loan repayments are more than 90 days late.
Residential mortgage arrears have been rising fast in Ireland. In 2012, arrears grew by over 25,000 new cases, a record, despite interest rates being cut to a record low by the European Central Bank in the same year.
In an unprecedented effort to stem the rise in mortgage arrears, the Irish Central Bank has announced a structured loan repayment protocol involving secured and unsecured creditors in a bid to increase the level of mortgage repayments.
In total, almost 12% of all residential mortgages in Ireland are now in arrears. The figure is significantly higher on investment properties, where almost one-in-five cases are in arrears.
To date, Irish banks have been hampered in their efforts to take more decisive action on non-performing loans as a result of a legal wrangle.
Mortgage arrears statistics for Q1, 2013 are due out shortly.