Dáil Éireann Debate, Thursday - 17 January 2013
76. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the level of household/personal debt continues to be monitored by his Department; whether particularly positive arrangements can be entered into by the borrowers with such institutions particularly when a situation has been caused by economic factors outside the control of the borrower; and if he will make a statement on the matter. [2202/13]
View answer77. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to monitor the level of mortgage debt arrears; if any particular cognisance is taken of the borrower's situation such as loss of employment or business; if any particular set of procedures have been recognised to deal with such situations; and if he will make a statement on the matter. [2203/13]
View answer78. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which house repossessions have taken place over each of the past four years to date both in respect of the family home or other circumstances; if it has been found possible to accommodate family home borrowers in the first instance; and if he will make a statement on the matter. [2204/13]
View answerI propose to take Questions Nos. 76 to 78, inclusive, together.
My Department continually monitors the data it receives on mortgage debt. The Central Bank compiles and publishes quarterly mortgage arrears and repossession statistics for both primary domestic homes (PDH) and buy-to-let (BTL) mortgages and my Department monitors these statistics closely. These statistics which go back to September 2009 in respect of primary dwellings, are available on the Central Bank’s website at http://www.centralbank.ie.
There can be many causes of debt, both within and outside the borrower’s control. The Code of Conduct on Mortgage Arrears (CCMA) does not specifically deal with these, rather it sets out procedures to deal with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence. All regulated mortgage lenders must comply with the requirements of this Code. The CCMA can also be accessed on the Central Bank’s website.
The Code provides that mortgage lenders should allow for a flexible approach in the handling of arrears and pre-arrears cases and that they should aim at assisting the borrower who is in genuine difficulty as far as possible having regard to the specific circumstances. In particular, the CCMA provides that a lender’s Arrears Support Unit (ASU) must base its assessment of the borrower’s case on the full circumstances of the borrower including:
- the personal circumstances of the borrower
- the overall indebtedness of the borrower
- the information provided in the standard financial statement (SFS)
- the borrower’s current repayment capacity, and
- the borrower’s previous history
Furthermore, the CCMA requires that ‘A lender must have a dedicated section on its website for borrowers in, or concerned about, financial difficulties which must include:
- the information booklet required under provision 12;
- information on the level of charges that may be imposed on borrowers that do not co-operate with the lender; and
- a link to any website operated by the MABS that contains information about mortgage arrears.’
The information on the website must be easily accessible from a prominent link on the lender’s home page. Some lenders have developed budgeting tools and videos to help customers complete the SFS and FAQ sections on mortgage arrears and forbearance arrangements on their websites.
The Code also requires that ‘A lender must prepare and make available to borrowers, an information booklet providing details of its Mortgage Arrears Resolution Process (MARP), which must include:
- an explanation of its MARP, including the alternative repayment measures available to borrowers and outline in general terms, the lender’s criteria for assessing requests for alternative repayment measures;
- a statement that the borrower will not be required to change from an existing tracker mortgage to another mortgage type;
- information about the potential availability of relevant State supports such as mortgage interest relief or Mortgage Interest Supplement;
- relevant contact points (i.e., the dedicated arrears contact points not the general customer service contact points); and
- reference to relevant website(s) operated by the Money Advice and Budgeting Services (MABS)’.
The Central Bank has informed me that it recently wrote to all lenders to remind them of these provisions and that their MARP booklet and websites should be updated to include the longer term options as they are rolled out and to make reference to the Government initiatives in this area.
In relation to overall household indebtedness, the latest Central Bank data show that at the end of the second quarter of last year, total household indebtedness amounted to €178.5 billion. This represents a decline of 12½ per cent since household debt peaked at just under €204 billion at the end of 2008. The data also shows that the ratio of household debt to disposable income continues to decline, which is an important trend.
