Repossession filings in the courts will double by the end of the year compared to 2007, as the falling housing market traps more and more home-owners in arrears, according to new research by credit rating agency Moody's.

The agency's projections show the number of summonses and orders for foreclosure will reach nearly 1,000 in 2008 after just topping 500 in 2007. By June of this year the number of granted orders for repossession and court summons was at the level recorded for the whole year in 2007, Moody's said in its latest note on Irish residential mortgage-backed securities.

Those figures will almost certainly get worse in the coming year or two, as more houses fall into negative equity, depriving home-owners of the option of redeeming their mortgages in full when they fall behind in payments.

Irish borrowers have tended not to default on their home loans because rising house prices allowed them to realise the equity in their homes to pay the debt in full before the lender is forced to foreclose. But the redemption window is closing rapidly as house prices plummet. This could lead to a steep increase in repossessions as banks seek payback for overdue loans.

Moody's predicts the coming months could see a rise in mortgage prepayments as distressed borrowers try to escape their bad debts before losing any accumulated equity in their property. The agency's data shows a slight drop in redemptions year-on-year in 2008, while defaults have almost doubled, although the absolute number is small at just 0.13% of all mortgages.