The Central Bank has engaged with mortgage lenders in relation to negative equity mortgages to develop a mortgage product that would allow home owners to sell their existing home and transfer the negative equity portion of the original loan to the new loan. In order to ensure that proposals in relation to such mortgages are consistent with the Central Bank’s consumer protection and prudential policy objectives, the proposed criteria for any such facility need to be agreed in advance between mortgage lenders and the Central Bank. While the provision of negative equity mortgages will facilitate people moving homes and generate transactions in the housing market, the Central Bank has informed me that it is not expected that there will be a large take up of this product, as all sales must be sustainable and comply with the affordability and suitability provisions set out in the Consumer Protection Code. It is worth noting that a decision to introduce a negative equity type product is a matter for each mortgage lender and is based on commercial and policy considerations.
The Deputy will be aware that the Central Bank in its quarterly publication on Mortgage Arrears and Repossession statistics, publishes data on the number of mortgages restructured by quarter but it does not publish data in the format requested by the Deputy. The latest Central Bank data can be accessed at http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx. With regard to assisting borrowers in arrears the Central Bank published the revised Code of Conduct on Mortgage Arrears (“CCMA”) recently, setting out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their principal primary residence (whether in positive or negative equity). The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. The revised CCMA came into effect from 1 July 2013 and can be accessed on the Central Bank’s website at www.centralbank.ie.