Dáil Éireann Debate, Thursday - 13 February 2014
90. Deputy Terence Flanagan asked the Minister for Finance if his Department has approved AIB writing off debt by way of split mortgages and other products; his Department's policy in this area; and if he will make a statement on the matter. [7406/14]
View answerAs the Deputy will be aware under the Relationship Framework the State does not intervene in the day to day operations of the bank or their management decisions regarding commercial matters.
I have been informed by AIB that the split mortgage product is just one of a number of sustainable solutions available to customers in arrears. Customers in arrears will be reviewed for eligibility and debt compromise will not necessarily form part of the new split mortgage. The solution will be proposed to the customer based on their affordability if they are deemed to be eligible.
On a general policy level, however the Government has taken a number of important steps to address this serious problem.
An innovative Personal Insolvency Act is now in place and the Insolvency Service of Ireland has been established to operate the new non-judicial debt settlement arrangements along with the changes made to the bankruptcy rules. A Mortgage to Rent scheme now provides a solution to keep those with severe mortgage difficulty to remain in their homes. The Mortgage Advisory and Information Service has been established and includes an information website, a telephone helpline, and independent advice for mortgage holders. The Central Bank is continuing its engagement with the lenders and has now introduced meaningful targets on the 6 main banks to offer solutions to their distressed mortgage holders.
All of the necessary elements to effect meaningful solutions to the mortgage arrears problem are now in place. The expectation now is that the banks with the co-operation from their customers in difficulty will work together to ensure that this issue is addressed in a definitive manner over the course of 2014.
