There has been no change in policy in relation to dividends from the HFA. The primary concern is to ensure that the HFA, like any financial institution, maintain sufficient reserves.
The reserves of the Housing Finance Agency at the end of 2012 stood at €72.8m having increased by €13.7m during 2012. It was considered by the Board that the Reserves, which are maintained at prudent levels to counter risk, had reached a point that allowed a dividend of €20m to be declared. A dividend of €20m to the Housing Finance Agency's beneficial shareholder, the Minister for Public Expenditure and Reform, was agreed and then declared at the Agency's Annual General Meeting on 25th April 2013.
However, local authorities had introduced a Mortgage Arrears Resolution Process (MARP) in 2012 for local authority mortgage holders that are in or are facing mortgage arrears. The Local Authority MARP process is in line with the guidance set down by the Central Bank, and comprehensive information on this process is available at www.keepingyourhome.ie. My intention in accepting a dividend, which was agreed with the Minister for Environment, Community and Local Government, was that the dividend should be for the benefit of the Local Government Mortgage Arrears Resolution Process Fund. This will greatly enhance the capacity of that resource to assist local authority borrowers in mortgage distress.
Accordingly, it was decided in late 2013 to waive the dividend as financial procedures prevented the direct application of the dividend to the MARP Fund. On waiving my rights to the dividend, I requested that the HFA uses the funds to help address the issue of mortgage arrears in the local authority sector and that HFA Management will arrange a suitable mechanism for forwarding the funds into the Local Authority MARP fund. In order for the HFA to pay the €20m in funds directly into the MARP Fund, legal advice indicates the HFA may require changes to its statutory powers and its Articles of Association. I understand that the legal mechanism required to pay the €20m into the MARP Fund is currently under discussion between the Housing Finance Agency and the Department of Environment, Community and Local Government, and this mechanism is expected to be in place in 2014.