PEOPLE who took out a mortgage with subprime lenders are four times more likely to be in arrears than if they took a loan with one of the mainstream banks, new figures show.
The level of arrears for people who took out subprime mortgages is so high it makes up more than half of the value of all the mortgages owed to subprime lenders.
Subprime mortgages were issued to people who were turned down for finance by a mainstream bank. These people had a poor credit history or an irregular income. Start Mortgages, Springboard, GE Money, and Stepstone were among the subprime lenders during the boom.
Fianna Fáil’s Michael McGrath, who obtained the figures, said Government inaction on subprime mortgage arrears was “inexcusable”.
The figures supplied to him by Finance Minister Michael Noonan show that 19,935 mortgage loans issued by subprime lenders were in arrears of more than 90 days as at the end of December. This is an increase of almost 2,000 since end September.
The subprime sector now accounts for one in five of all the residential mortgage accounts that are in arrears for more than three months.
The value of subprime arrears amounts to €4.6bn, Mr McGrath was told. This is more than 54pc of the total outstanding mortgages issued by subprime lenders.