Dáil Éireann Debate, Tuesday - 8 April 2014
121. Deputy Terence Flanagan asked the Minister for Finance if the relationship frameworks with banks prevents him or the Central Bank from giving a direction to ensure that a full suite of standardised mortgage resolution measures are offered by all banks; and if he will make a statement on the matter. [16344/14]
View answerAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks or their management decisions regarding commercial matters. This includes giving any direction with respect to particular products offered by these banks.
I have also been informed that the Central Bank does not direct the banks which products it should offer customers either.
Having said that a sustainable solution has been broadly defined in the Central Bank's published MART document as one of the following:
"a) An arrangement concluded under a bank's MARP in accordance with the CCMA, where the borrower is cooperating under the MARP and the bank has satisfied itself that the arrangement provides a sustainable solution which is likely to enable the customer to meet the original or, as appropriate, the amended terms of the mortgage over the full remaining life of the mortgage, including repayment of the original or an agreed revised principal sum where offered. This may include an interest only or other temporary solution for a period if it is likely that full repayment of the original or revised principal will be achieved over time, or where there is a payment plan to return the account to sustainability through the clearance of arrears.
b) A personal insolvency arrangement effected under the Personal Insolvency Act 2012; or
c) If an arrangement could not be reached or is not appropriate, that the PDH and BTL property securing the loan has been voluntarily sold or, failing that, any situation where a Specified Credit Institution takes possession of the property including by way of voluntary agreement with the borrower or by Court Order or otherwise".
A range of sustainable solutions have been utilised by each of the lenders to date. These include, but are not limited to, the following:
- Term Extensions
- Split Mortgages
- Permanent Interest Rate Reductions
- Voluntary surrender solutions
