Dáil Éireann Debate, Tuesday - 28 January 2014
205. Deputy Pearse Doherty asked the Minister for Finance regarding his comments in Dáil Éireann on 16 January 2014, that he has conveyed to the six main banks that letters threatening repossession should count as a sustainable solution under MARTs, the way the information was conveyed; and if he will publish his correspondence with the banks on the issue. [4045/14]
View answerThe strong view of the Government is that, in respect of co-operating borrowers under the Mortgage Arrears Resolution Process, repossession of a person's primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to repossession. I can assure the Deputy that both my Department and I have expressed this view to the lenders and are keeping in regular contact with them on this important issue.
The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by the lender to address a mortgage difficulty before any legal action is considered. Furthermore, as the Deputy is aware, under the Mortgage Arrears Resolution Targets (MART) process, the Central Bank is requiring the main lenders to work through their mortgages in arrears of more than 90 days and, where possible, to propose and conclude sustainable restructures with their borrowers in arrears.
On the basis of their audit of the bank's mortgage arrears targets, the Central Bank has indicated that all six mortgage lenders covered by the MART process have reported that they met the 20% proposed sustainable solutions target for the second quarter of 2013 and also the 30% target for the third quarter in 2013. The subsequent targets set by the Central Bank will be the subject of further audit work to ensure consistency with the sustainability principle in respect of solutions being offered by the lenders.
It is important that any bank proceeding to legal recourse with co-operating borrowers, in circumstances where an alternative sustainable arrangement is feasible and can be agreed, is not acting in a manner consistent with the MART process, or with the CCMA.
Of course, the CCMA and MART can only achieve positive results in circumstances where the borrower cooperates with the lender and engages with the process. Where this does not happen, the lender may have no other option but to go down the legal route to deal with an arrears case. However, if that course of action leads the borrower to commence a constructive engagement, this can lead to a more favourable conclusion for the respective parties.
Regretfully, however, it must also be accepted that due to the individual circumstances, not all mortgages can be made sustainable and that in these limited circumstances, it will be in the best interests of both parties to resolve the situation in a fair manner.
