Dáil Éireann Debate, Thursday - 17 July 2014
181. Deputy Michael McGrath asked the Minister for Finance his views on the manner in which banks not covered by the mortgage arrears resolution targets are dealing with the problem of mortgage arrears; and if he will make a statement on the matter. [32691/14]
View answerThe Central Bank's Mortgage Arrears Resolution Targets (MART) process, as announced in March 2013, sets time bound and measurable targets for the six main banks requiring them to systematically address their arrears book. Under this rolling process, quarterly performance targets have been set to require the banks to propose and put in place durable long term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears. The Central Bank has advised that those institutions covered by the MART cover the vast majority of the principal dwelling houses (PDH) and buy-to-let (BTL) mortgage book in Ireland, accounting for 9 out of 10 mortgages held.
The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) applies to the mortgage lending activities of all regulated entities, except credit unions, operating in the State, and consequently not just to those banks covered by the Mortgage Arrears Resolution Targets. The CCMA sets out requirements for all mortgage lenders dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender and that long term resolution is sought by lenders with each of their co-operating borrowers. This framework is referred to as the Mortgage Arrears Resolution Process (MARP) which sets set out the following steps which lenders must follow:
Step 1: Communicate with borrower;
Step 2: Gather financial information;
Step 3: Assess the borrower's circumstances; and
Step 4: Propose a resolution.
Under the CCMA, if a borrower is not satisfied with the way that their lender is dealing with them or if they think the lender is not complying with the CCMA, the borrower can make a complaint to his lender. Borrowers also have the right to appeal to the lender's Appeals Board if they are not happy with the alternative repayment arrangement offered or where a lender declines to offer an alternative repayment arrangement or if they believe they have been wrongly classified as not co-operating. If the borrower is still unhappy with the outcome of the appeal, or the complaint made to the lender, they can refer the matter to the Financial Services Ombudsman.
The Central Bank's latest 'Residential Mortgage Arrears and Repossessions Statistics' publication for the end of Q1 2014 (http://www.centralbank.ie/press-area/press-releases/Pages/ResidentialMortgageArrearsandRepossessionsStatisticsQ12014.aspx), shows that the number of mortgage accounts for PDH in arrears, fell for the third consecutive quarter. A total of 132,217 PDH accounts were in arrears at end March 2014 which is a decline of 3.2 per cent relative to end Q4 2013. The publication also shows that a total of 29,801 new restructure arrangements were agreed during the first quarter of 2014 which reflects a 25.3 per cent increase on the number of new arrangements agreed during the previous quarter.
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 data shows that an increasing number of durable long term mortgage restructures is being put in place. However, it is accepted that it will be necessary for lenders and borrowers to continue to build on this.
