I have no plans to introduce such a scheme.
As the Taoiseach said in the House earlier this week, the Government has been pro-active in seeking to safeguard the interests of households that experience difficulties in meeting their mortgage payments owing to circumstances beyond their control. A particular priority is to ensure as much as possible that difficulties in relation to mortgage arrears do not result in legal proceedings for home repossession.
One of the most important recent actions taken by the Government has been to include a mandatory requirement that banks operating in Ireland participating in the Guarantee Scheme confirm their compliance with the Irish Banking Federation (IBF) Code of Practice on Mortgage Arrears. This is a detailed and robust Code which has been operated successfully by banks in Ireland since 2000 and has long had a positive impact on the mortgage market here as evidenced by the very low number of Court Orders for repossession attributable to mainstream lenders that subscribe to the Code. The other IBF and Irish Mortgage Council members comply with the IBF Code on a voluntary basis.
There are two important supports under the Social Welfare system for people who find themselves experiencing difficulty in making their mortgage payments. The Mortgage Interest Supplement scheme provides short-term income support to those eligible who are unable to meet their mortgage interest repayments. My Department understands that about €20 million has been paid out under the scheme to-date in 2008. In addition, the Money Advice and Budgeting Service (MABS), is a national, free, confidential and independent service for people in debt or in danger of getting into debt.
The Financial Regulator's Consumer Protection Code (CPC) applies to home loan providers operating in the State. It requires mortgage lenders to undertake suitability assessments before offering a product or service to consumers. It also requires the regulated provider to contact the consumer as soon as it becomes aware that a mortgage account is in arrears irrespective of the amount of the arrears. Under the CPC, the regulated provider must have in place a procedure for handling accounts in arrears which includes a requirement that lenders should agree a remedial action plan with a borrower as soon as it detects arrears starting to emerge and to try to assist the borrower to manage his or her financial commitments and not allow the situation to worsen.
Home re-possession should be, and generally is, the last resort for the lender and the preferred method of dealing with arrears cases should be early intervention. Although the number of cases involving applications for possession orders has increased, it should be noted that this is from a low base. In addition, orders are not always granted and do not always represent residential mortgages nor are they always followed through by the lender. Levels remain low compared to historical averages and in comparison to similar jurisdictions such as the UK.
In the light of all of the above, I am satisfied that adequate safeguards are currently in place to minimise home re-possessions in Ireland. However the Government will continue to monitor the situation carefully and will of course consider the requirement for any further responses in order that the legitimate interests of mortgage holders are safeguarded.