Tá fáilte roimh an Aire Stáit, who is the right man for this Adjournment debate. He is not quite the Minister for Finance, but he is in there with a shout. This Adjournment debate concerns why the Central Bank is not using the mortgage arrears resolution process, MARP, as an instrument to benchmark against how the banks are doing to help customers in arrears reach a mortgage resolution. I am also asking about the progress made towards achieving targets.
We have a huge problem on our hands. Some 142,892 mortgages are in arrears for more than three months, which amounts to one in every five homeowners. Some two thirds are in negative equity, which is a trap. This is about nothing other than the family home. I cannot think of anything more important to a family. What has the Government done to help? It has introduced the Personal Insolvency Act, which is good but very slow. We should not need to go down that route if a resolution can be sorted out between the bank and the homeowner in arrears.
This is where the Central Bank's MARP comes in. In March 2013, the Central Bank introduced the MARP, which has five detailed stages - communication, the completion of a standard financial statement, assessment, resolution and appeal. If people are not happy with the appeal, they can go to the Financial Services Ombudsman. I was very surprised that, at the September 2013 meeting of the Joint Committee on Finance, Public Expenditure and Reform, the banks were allowed to produce vague, general statements on their progress towards achieving the targets set by the Government to help people reach a resolution. At the very least, the banks should have been asked to specify how many mortgages in arrears were at various stages of the MARP. This would have given a clearer indication of the work the banks were doing to assist customers to find a sustainable mortgage solution. MARP is a valid instrument yet the Governor, Professor Honohan, and the Central Bank are not using the instrument.
A colleague tabled a parliamentary question and the reply stated: "The Central Bank of Ireland has informed me that it does not track the number of borrowers covered under the MARP but does track the number of mortgage accounts in arrears". What is the point if we do not have joined-up thinking between the banks, the Central Bank and homeowners in arrears? The Government is setting targets.
How can one manage a process if one is not measuring it?
The latest quarterly figures from the Central Bank, issued in June, show, as I said, almost 143,000 mortgage accounts in arrears, 79,000 of which are in a restructured arrangement. These are quite shocking figures. What about the 63,000 or so mortgage accounts that are in arrears but have not been restructured? There are huge gaps in the process. What is the point of having a mortgage arrears resolution process if the Central Bank and its Governor, Mr. Honohan, do not use that valid and useful instrument to track the progress of its constituent banks in working with customers to achieve mortgage solutions? How can the Government reliably establish the progress made in achieving the targets that have been set if it is not more tightly managing the process?
The bottom line is that the Central Bank cannot manage what it does not measure. It is a process worth managing because it is, after all, about helping people to keep their homes. We must have a more proactive approach by the Central Bank and the Governor on this matter. The last Government was guilty of light regulation in this area, while the former Regulator, Mr. Neary, did not manage the process in an effective way. I am concerned that danger may lie ahead if Mr. Honohan does not take a more proactive stance with the banks to ensure sustainable solutions are devised for home owners. What is the point of having the useful instrument that is the mortgage arrears resolution process if it is not used?