Dáil Éireann Debate, Tuesday - 25 March 2014
208. Deputy Brian Walsh asked the Minister for Finance his strategy for dealing with more than 30,000 buy-to-let mortgages that are currently more than 90 days in arrears; if he envisages that the number of repossessions in this area will increase; and if he will make a statement on the matter. [13189/14]
View answerThe Government is aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and the Deputy will know that a comprehensive strategy to tackle the problem is in place.
The Deputy will be aware of the Central Bank's Mortgage Arrears Resolution Targets (MART) announced last March which sets time bound and measurable targets for the six main lending banks requiring them to systematically address their arrears book. The targets cover both proposed and concluded sustainable solutions with respect to the lenders principal dwelling homes (PDH) and buy-to-let (BTL) mortgagees. Under this rolling process, quarterly performance targets have been set to the end of June 2014 to require the banks to propose and put in place durable long term solutions to address individual cases of mortgage arrears of more than 90 days in arrears.
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. In particular, with respect to the third quarter 2013 target, which is the latest available data, the lenders have reported to the Central Bank they had issued proposals to 43% of mortgage accounts in arrears (PDH and BTL) against the 30% target.
The Central Bank's 'Residential Mortgage Arrears and Repossession Statistics' published earlier this month, shows that at end-December 2013 there were 145,530 residential mortgage accounts for buy-to-let properties held in the State. Of this total stock of accounts, 30,706, or 21.1 per cent, were in arrears of more than 90 days, reflecting a decrease of 1.5 per cent over the quarter.
In addition, the monthly mortgage restructures and arrears data published by my Department will also provide an impetus for those MART banks to increase the pace of provision of mortgage restructures. The latest publication, in respect of the end of January, shows that some progress has been made in putting permanent mortgage restructures in place. For example, the number of permanent restructures of buy-to-let mortgages more than 90 days in arrears has risen from around 5,600 in December to around 5,800 in January 2014. The data published by my Department and the Central Bank would appear to demonstrate some success by the lenders in addressing the accounts in arrears and putting in place appropriate measures to prevent borrowers from going into arrears.
My colleague, the Minister for Justice and Equality has informed me that there was, as expected, a marked increase in the number of Civil Bills lodged in the courts following the passing of the Land and Conveyancing Law Reform Act 2013. However the Courts Service has indicated that the situation has since stabilised and that, to date, there has been no significant change in the numbers of Civil Bills lodged. It is however important to point out that the issuing of a Civil Bill does not automatically lead to a repossession, for example a borrower who has not been engaging with his lender may re-engage following the issuing of a Civil Bill and this may lead to an alternative outcome.
Early and effective engagement between borrowers and lenders is key to resolving the cases of mortgage difficulty. Where there is effective and meaningful engagement by all parties regarding a mortgage difficulty, the Central Bank's mortgage arrears and restructures statistics and my Department's monthly mortgage data publications show that an increasing number of durable long term mortgage restructures are being put in place. However, it is accepted that it will be necessary for lenders and borrowers to continue to build on this.
