The Central Bank in Ireland has been producing data that “grossly” overstates mortgage arrears, calling into question a raft of home repossessions, according to a report in the Irish Independent.

It means that the official figures overstate the amounts of money people actually owe. The issue stems from the way vulture funds treat arrears data. Experts say the revelation could have huge implications for people facing repossession of their homes as people may lose their homes if a judge is told their arrears are higher than they actually are.

Founder of the Askaboutmoney.com website Brendan Burgess discovered the problem, which he said throws the entire system for measuring arrears into doubt. Earlier this month, the Central Bank produced figures showing almost 5,000 residential mortgages owed to vultures were in arrears for more than two years. The arrears owed total some €834m.

However, the problem stems from the fact that the Irish Central Bank is following controversial calculations of arrears used by vulture funds. This involves counting an entire loan as being in arrears if it is called in by the lender.

Burgess gave an example of someone who has a mortgage of €100,000, but they are €10,000 in arrears. If the vulture fund decides to call in the loan, it treats the entire loan as being in arrears. This means the amount of arrears effectively balloons overnight from €10,000 to €110,000.