The Report of the Inter-Departmental Working Group on Mortgage Arrears (the ‘Keane Report’) was published in October 2011. The key strategic conclusion of the Keane Report was that there should not be a blanket debt forgiveness approach but that instead the focus should be on the development, by both lenders and the State, of measures that will be of assistance to those mortgage holders, having regard to individual circumstances, experiencing genuine difficulty with their mortgage commitments. The Government is now actively progressing the implementation of the main recommendations contained in that Report and to that end a Government committee, chaired by An Taoiseach, continues to meet. Also a high level Steering Group, chaired by my Department, coordinates work at official level across the relevant Departments and the Central Bank. The Government has accepted the overall recommendations of the Keane Report and a number of significant milestones have now been achieved in their implementation:
- Personal insolvency reform was identified in the Report as a central catalyst for the resolution of the mortgage arrears problem and it was stated that, without effective legislation in this area, the mortgage arrears problem will not be resolved. As the Deputy will be aware, the Personal Insolvency Bill was published last June and the Bill has been progressed by the Minister for Justice, Equality and Defence and Dáil Report stage on the Bill has recently concluded. It is hoped to complete all stages of the parliamentary process before the end of the year;
- The Report was also of the view that Mortgage Interest Supplement is not an appropriate long term housing support and instead it recommend, as a social housing response, the establishment of two schemes, “mortgage to rent” and “mortgage to lease”, for eligible households. On foot of the recommendations, the primary focus has been on the progression of the former and a “mortgage to rent” scheme was launched on a pilot basis in February and this scheme was subsequently extended nationally by the Minister for Housing and Planning in June 2012. This option is now available in appropriate cases and will be of benefit to low income families whose mortgage situation is unsustainable to allow that family remain in their home;
- The recommendations of the Keane Report also included, in addition to standard forbearance, a range of possible solutions such as “trade down mortgages”, “split mortgages” and “sale by agreement” that could be explored and offered by lenders if suitable to borrower and lender. A case by case approach is required in this matter and the area of sustainability will be a key factor when considering an appropriate solution in this area. The Central Bank under its MARS project has been intensively working with lenders to ensure that they have a range of longer term options, such as those outlined in the Report or other appropriate options as may be developed by lenders, and that they have the capacity to implement effectively. The rollout of these options commenced in the final quarter of this year with Central bank oversight;
- An extensive independent mortgage advice framework has now been put in place by the Minister of Social Protection comprising (i) an enhanced website www.keepingyourhome.ie (ii) a Mortgage Arrears information helpline, and (iii) the provision of free independent ‘one-to-one’ professional financial advice to borrowers when considering a long term forbearance/resolution offer from their lender. The list of accountants providing this service is located on the www.keepingyourhome.ie website.
