Dáil Éireann Debate, Monday - 11 September 2017
170. Deputy Joan Burton asked the Minister for Finance if he has asked the Central Bank to procure an independent assessment of the arrears and negative equity loan books of the banks in view of the recent programme for Government commitment; and if he will make a statement on the matter. [38045/17]
View answerThe Deputy will be aware that the Central Bank has an ongoing role in monitoring the level of arrears and negative equity on mortgages. The Programme for a Partnership Government contains a range of commitments in the broad housing and banking area and my Department regularly engages with the Central Bank on all the Programme for Government Commitments which will impact on the Central Bank and its role in relation to mortgages.
In this context, at the end of 2016 the Central Bank produced a report on mortgage arrears:-
(http://www.finance.gov.ie/wp-content/uploads/2017/08/CBI-Mortgage-Arrears-Report-FINAL.pdf).
That report provides a detailed assessment of mortgage arrears in banks and non-bank entities and includes analysis on mortgage restructuring activity and the range of solutions offered that may affect borrowers' capacity to remain in their primary residence. The report notes that progress on mortgage arrears is well established and clearly moving in the right direction.
This downward trend in mortgage arrears has been maintained and the most recent Central Bank data in respect of the first quarter of 2017:
(https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/2017q1_ie_mortgage_arrears_statisticse2a9c5134644629bacc1ff0000269695.pdf?sfvrsn=8)
indicates that 53,100 primary dwelling mortgage accounts (7.2% of total) are more than 90 days in arrears. This represents the fourteenth consecutive quarterly decline in this key arrears indicator. In terms of negative equity, table 7 of the most recent Central Bank's Household Credit Market Report
(https://www.centralbank.ie/docs/default-source/publications/household-credit-market-report/household-credit-market-report-2017h1.pdf?sfvrsn=2)
estimates that 12 per cent of PDH loans were in negative equity as of June 2016. The number of mortgages in negative equity (most of which are performing) have been reducing and this has important implications for the wider economy such as improving mobility amongst those affected, potential greater spend on home improvements and maintenance, and increased consumption via the wealth effect.
