Daft Property - Irish Property News

The banks' forbearance to customers in arrears may be storing up future trouble as household debt spirals... The banking system is desperately trying to hold back an ever-rising tide of overdue mortgages as high unemployment and increasing mortgage rates play havoc with family finances. Lenders have been ordered by the Financial Regulator to help people stay in their homes, even when they've stopped paying their loans, but how much forbearance can our weak financial system take before buckling? More than one in 10 borrowers is now in distress, according to the latest quarterly figures on residential mortgage arrears from the Financial Regulator and unofficial estimates by the Irish Banking Federation (IBF). Around 36,000 households are now more than 90 days in arrears, with two-thirds of that total more than six months behind on their mortgages, according to the regulator. The IBF is preparing new data on restructured mortgages – loans switched to easier repayment arrangements ...

Mortgage bid to unlock market could backfire... NEGATIVE equity is the scourge of homeowners who bought their houses in the past few years. By the end of this year, as many as one-in-three mortgage holders are expected to be in negative equity -- where the value of their home has collapsed to such an extent that they owe their lender more than it is worth. Economic and Social Research Institute (ESRI) economist David Duffy made the estimate based on house prices having fallen by 30pc from the peak of the housing boom in 2007. But most commentators say that house prices have fallen by around 50pc from the peak. In that case, the ESRI estimates that some 350,000 homeowners will end up in negative equity this year. Being in negative equity means you cannot sell your house to move somewhere else. This is because you will still owe the bank more than the sale price of the home. Banks will not normally allow you to sell up in that situation. This is why Ulster Bank and EBS Building Society a...

Struggling homeowners turn to SVP... Under-pressure homeowners are using every last cent to pay their mortgage bills, leaving them so short of cash they are turning to the Society of St Vincent de Paul for extra money to buy food and pay utility bills. In the capital, St Vincent de Paul volunteers dealt with a massive 10,000 calls in the first four months of this year -- up 30 per cent on 2009. Now they fear there will be a further raft of people in trouble with their mortgages when redundancy payments given to people who lost their jobs last year run out. According to ratings agency Moody's, the number of Irish people who have fallen behind in their mortgage repayments has come close to doubling in the last 12 months. The rate of delinquency in mortgage repayments -- those with more than 90 days of mortgage arrears -- rose to 3.8 per cent in March up from 2.1 per cent during the same month last year. According to John Monaghan of the St Vincent de Paul Society, more and more peopl...

The mortgage debt crisis in this country is much worse than the banks' official figures would have us believe... A report published two weeks ago by prestigious think tank Organisation for Cooperation and Development (OECD) on the mortgage crisis here was unambiguous. For a dozen years, Irish house prices raced ahead at the fastest rate and for a longer time than anywhere else in the world. When the bubble burst in 2007, it left Irish households facing – along with the Dutch and the Danes – the highest family debts in the world. A bird's eye view of OECD housing markets by Christophe Andre reveals that Irish house prices since the 1970s were many times above the prices in Britain, Netherlands, Spain and France. Some years, several countries experienced house price booms simultaneously, said Andre, who defines a boom as prices having increased by 25% or more over five years. Doubling of household debt But since 1995, 13 countries of his sample of 17 countries simultaneously sho...

Mortgage timebomb will cause new banks crisis when it goes off... The recommendation that the moratorium on repossessions should be extended by a further year is another sign that the clock is ticking on our €150bn mortgage time bomb. Last year all of the main banks and building societies agreed not to repossess the homes of people whose mortgages were in arrears for at least 12 months. Now, with the 12-month moratorium about to expire for many of those in arrears, there are fears that the number of homeowners facing repossession could rocket. For some it has already happened. Entertainer Adele King (better known as Twink) revealed that her family home was about to be repossessed by her lender. Twink's statement came on the same day that the Oireachtas Committee on Social and Family Affairs recommended the 12-month moratorium on home repossessions be extended to 24 months. The recommendation comes just 11 days after the Financial Regulator extended the 12-month repossession morator...

Green minister fears Greek-style crisis if banks don't get houses in order 'fast'... Ireland could be plunged into a Greek-style crisis unless the banks get their house in order "quickly''. That's the stark warning issued by the Communications, Energy and Natural Resources Minister Eamon Ryan yesterday. "The final bill for everything, that is all the madness in mortgages, the developers and general finance could be as high as €34bn," he warned. "We have done a job in projecting the Government's ability to manage its own finances. Now we have to convince the outside world that the banks have the capacity to manage their own finances," he said. Mr Ryan also noted that within Government, the view was "the sooner we do it the better''. Referring to the improved image of Ireland in the international community, he said of the banking crisis: "We have a limited window of opportunity to resolve this now. If we miss this opp...

Home repossessions will soar as 6,400 are in arrears... AN avalanche of repossessions is now expected after new figures show close to 6,400 people stopped paying their mortgages more than a year ago. The number who have failed to pay their mortgages for a period of 12 months or more is three times the level it was at a year ago. These homeowners are now almost certain to have their homes repossessed. Pressure And struggling homeowners face renewed pressure from next month, which will be the first time Bank of Ireland and AIB will be able to begin new legal proceedings against homeowners who have failed to pay their mortgage for a year. A moratorium agreed with the Government forced the banks to wait a year before starting legal action to repossess homes from those who failed to pay their mortgages. Many of the 6,400 people at dire risk of losing their homes should not have been given their mortgages as they had no hope of repaying them, mortgage experts said. These bad lending decision...