Dáil Éireann Debate, Wednesday - 3 February 2010
113 Deputy Phil Hogan asked the Minister for Finance the number of meetings which have taken place to date on the issue of developing policy on mortgage arrears and home repossessions; and if he will make a statement on the matter. [5236/10]
View answerThe Government is conscious of the high value placed on home ownership in Ireland and of the efforts Irish people make to secure and retain their own home. The Government's objective from both a social and an economic policy point of view is that home owners who lose their jobs should be assisted to retain their homes during their period of unemployment.
The Government has committed in the Renewed Programme for Government to introduce new measures to protect families having difficulties with their home mortgage payments.
There have been a number of developments in this area. I approved the setting up of an Inter-Departmental Mortgage Arrears Review Group, chaired by my Department, for the purpose of collecting information and examining options, including initiatives in other jurisdictions, in relation to the matter of mortgage arrears and repossessions. This Group has met on two occasions and work has commenced on bringing forward options for dealing with these matters. The Mortgage Arrears Review Group is examining options for improving State supports for home owners with mortgage arrears including schemes in operation in the USA and UK. These schemes are designed to address particular problems for particular groups of home owners and include options for refinancing mortgages, modifying the terms of existing loans, shared equity, and purchase of mortgages for the purpose of renting back to the home owner.
I have been discussing with my Cabinet colleagues the best way in which to proceed in this matter and I will be bringing proposals to Government.
I have spoken extensively in this House on the supports which are available to those homeowners who find themselves in difficulty. These supports include the Code of Conduct on Mortgage Arrears, the Mortgage Interest Subsidy Scheme and the services provided by the Money Advice Budgeting Services. In addition I have written to the Financial Regulator requesting that consideration be given to extending the moratorium on mortgage arrears from 6 months to 12 months for all mortgage lenders.
The Deputy will be aware that in my Budget speech in December the Government refocused mortgage interest relief on those who bought their homes at the peak of the market, many of whom find themselves in negative equity. Where a homeowner's entitlement to mortgage interest relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017.
Comprehensive statistics on mortgage repossessions have not been kept, but my Department has obtained reports from lenders covered by the State Guarantee. The total of legal repossessions of owner occupier homes to the end of September 2009 by those lenders is twenty. In all cases mortgages were in arrears for over 24 months at time of repossession. While the number of repossessions is a concern to the Government, it is extremely low when compared to the UK and other jurisdictions. It is important to say that repossession orders granted by the Courts do not necessarily lead to homes being repossessed. It is important to note that when a repossession order is granted, homeowners can still work with their lenders in exploring alternative repayment measures such as those outlined in the Mortgage Code.
In relation to the position of mortgage holders generally, the Irish Bankers Federation published a Statement of Intent in November 2009 which provides further reassurance to homeowners who find themselves genuinely unable to maintain repayments on their principal private residence. The Statement of Intent has been agreed and supported by all IBF members and is a welcome development. It is also welcome that the IBF Oversight Committee on the implementation of the Statement of Intent will also include a representation from the Money Advice Budgeting Service.
I am confident that the recent measures taken by the Government along with the ongoing work of the Inter-Departmental Group and the existing supports I referred to, will assist those who are in difficulty with mortgage arrears as a result of unemployment and the economic downturn.
