The Government is very aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty. A special Government Sub-Committee is already in place since March last year to address the mortgage arrears problem. This Committee is chaired by An Taoiseach and includes all other relevant Ministers, and reflects the need for accelerated progress in this area. At official level, my Department is taking a lead role and in that context, a high level Steering Group, chaired by the Department’s Secretary General, was established to drive the implementation of the recommendations contained in the Report of the Inter-Departmental Working Group on Mortgage Arrears (the ‘Keane Report’). The Government’s strategy to assist those in mortgage difficulty is built around measures in four distinct areas – Personal Insolvency, a Mortgage Advisory Service, the Mortgage to Rent Scheme, and Engagement with the Banks, and considerable progress has now been achieved across this agenda.
The Central Bank also has a key role to engage with the mortgage lenders and to require them to meaningfully engage with their customers who have difficulty meeting their mortgage commitments. The Central Bank, under its MARS project, has for some time been intensively working with lenders to ensure that they have a range of longer term options, such as ‘trade-down mortgages’, ‘split mortgages’ and ‘sale by agreement’ or other appropriate options as may be developed by lenders for their distressed mortgage customers, and that they have the capacity to implement these in an effective manner. While progress in this area has not been as rapid as desired, it is true to say that greater effort and resources are now being deployed across the banks to this issue and real engagement on resolution options should now be further enhanced. In that context, I welcome the recent statement by the Governor of the Central Bank of Ireland at a conference on distressed property markets that, having ensured that the banks are much better staffed and organized for dealing with arrears, the Central Bank will be setting out its quantitative expectations for their effectiveness in achieving lasting solutions. The focus of this work for 2013 will be on the implementation of these strategies and that banks have the operational capability to implement effectively.
In addition, the Code of Conduct on Mortgage Arrears (CCMA) remains a key framework to govern the relationship between mortgage holders experiencing difficulty and their bank and offers very worthwhile protections. The CCMA provides that each bank must put in place a formal Mortgage Arrears Resolution Process (MARP) to deal with its mortgage customers who are in arrears or pre-arrears and for the establishment of dedicated arrears support units and appeals processes to handle such cases. The Central Bank has commenced a review of the Code of Conduct on Mortgage Arrears and this will include a public consultation. The CCMA requires updating due to the introduction of both the Personal Insolvency legislation and longer term mortgage resolution options. The review will also take into consideration recent developments that may be relevant to the issue of mortgage arrears and clarifications issued by the Central Bank since the current version was issued. In addition, the Central Bank has published a guide for consumers on mortgage arrears called ‘Mortgage Arrears – A Consumer Guide to Dealing with your Lender’ and this is available on the Central Bank website, http://www.centralbank.ie.
Ultimately the Government is of the view that it is the regeneration of the economy, the restoration of employment levels and income growth that will address the real social and economic problems associated with high levels of personal indebtedness. That is why Government is focussed through its many new initiatives at fostering and generating economic growth. The successful achievement of renewed growth in the economy will restore consumer confidence and bring the tangible and sustainable recovery that the country requires.
