Government hiding true extent of local authority mortgage arrears – McGrath

Fianna Fáil Finance spokesperson Michael McGrath has described as entirely inadequate the level of information being supplied by the Department of the Environment in respect of local authority mortgage arrears.

The most recent figures on the Department of the Environment website show that 31% of local authority mortgages are in arrears with 6,135 customers now more than 90 days behind in payment. This figure has risen steadily since the first quarter of 2010 when 24% of local authority mortgages were in arrears.  However data is not provided for the number of households who are in arrears for periods of more than 180 days leaving a major gap in understanding the trend.

“We know the situation in respect of local authority mortgages is bad but we don’t know just how bad as the Minister has declined to publish data on the number in arrears for more than 360 and 720 days.  These are standard benchmarks that are used in respect of assessing arrears in the private residential market and identifying those most in danger of losing their home, yet in a recent Dáil reply Minister Jan O’Sullivan stated the Department does not have this data.  I find this to be an extraordinary omission on the part of the Department of the Environment.  We cannot accurately appreciate the extent of the problem if we are operating in an information vacuum.  We know the trend is likely to be that the number in long terms arrears is rising consistently but we should have figures available to fully understand the extent of the problem we face,” commented Deputy McGrath.

“While there has been considerable attention on the process of dealing with mortgage arrears in the private sector, the question of local authority mortgages in difficulty has not been adequately addressed.  Over €1.2bn of local authority mortgages are outstanding with €250m worth of loans in arrears and 432 homes have been repossessed by local authorities since 2010. There also appears to be regional disparities in how councils are dealing with arrears with some more active in seeking repossession.  We need a national approach to this problem.  The starting point should be comprehensive data on the trend in local authority mortgage arrears and clear targets for dealing with the problem on a consistent basis across all 31 local authorities.  The current situation is unacceptable and the Minister needs to significantly improve the quality of information that is provided,” added Deputy McGrath.

Please find below relevant Parliamentary Question and reply:

Michael McGrath (Cork South Central, Fianna Fail)

To ask the Minister for Environment, Community and Local Government further to Parliamentary Question No. 520 of 30 April 2014 if he will provide data on the number of local authority mortgages that are more than 360 and 720 days in arrears; the way the number of cases in arrears by this amount has changed over the past three years; and if he will make a statement on the matter.

My Department publishes a wide range of housing statistics, including the number and value of local authority mortgages with a breakdown of those in arrears for more than 90 days. The statistics are available on my Department’s website by clicking “Mortgage Data/Arrears in Local Authorities” under the Housing Loans contents. My Department does not have data on loans in arrears for more than 360 and 720 days.

My Department issued guidelines to local authorities for dealing with mortgage arrears within the local authority sector in August 2012. Dealing with Mortgage Arrears – A Guide for Local Authorities available on my Department’s website.