Dáil Éireann Debate, Thursday - 17 July 2014
120. Deputy Michael McGrath asked the Minister for Finance the number of private residential and buy to let sub-prime mortgages here; the level of arrears on these mortgages; the average interest rate that applies to these mortgages; his views on the sub-prime sector; and if he will make a statement on the matter. [32469/14]
View answer189. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 36, 37 and 45 of 30 January 2014, the number of sub-prime mortgages that have been restructured to date; and if he will make a statement on the matter. [32714/14]
View answer190. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question Nos. 36, 37 and 45 of 30 January 2014, the number of orders for repossession granted to sub-prime lenders in 2013 and to date in 2014; the proportion this represents of all repossessions; and if he will make a statement on the matter. [32715/14]
View answer191. Deputy Michael McGrath asked the Minister for Finance the number of residential mortgages here that are classified as sub-prime; the number of sub-prime lenders currently operating in the market; the total value of sub-prime mortgages outstanding; the rate of arrears on these mortgages; the actions specific to the sub-prime sector which are being taken to address arrears; and if he will make a statement on the matter. [32716/14]
View answerI propose to take Questions Nos. 120 and 189 to 191, inclusive, together.
The Central Bank has advised that there is no such regulated category as 'sub-prime' lender but that phrase is sometimes used to refer to some non-deposit taking 'retail credit firms'. Retail credit firms are a regulated category of entities which are authorised to provide credit (in the form of cash loans) directly to individuals. Some firms authorised in this category are mortgage lenders. Retail credit firms have been subject to regulation by the Central Bank since 1 February 2008. A register of all Retail Credit Firms is available on the Central Bank website at the following link: http://registers.centralbank.ie/DownloadsPage.aspx.
I am informed by the Central Bank that, at end-March 2014, six of these firms had a total of 17,789 primary dwelling (PDH) mortgage accounts of which 4,554 were classified as restructured; four had a total of 739 buy to let (BTL) mortgage accounts of which 88 were classified as restructured. Regarding the level of outstanding debt on these accounts, there was a total of €3.316bn in outstanding PDH debt and a further €0.158bn in outstanding in BTL mortgage debt. Of that outstanding debt, mortgage accounts amounting to €1.880bn (PDH) and €0.083bn (BTL) respectively were in arrears of over 90 days. The Central Bank has advised that it does not publish the interest rates applied by regulated entities.
The Deputy will be aware that the Central Bank's Mortgage Arrears Resolution Targets (MART) announced in March 2013 set time bound and measurable targets for the 6 main banks requiring them to systematically address their arrears book. The Central Bank has informed me that retail credit firms are not subject to the prudential standards set out in the Central Bank's MART. However, the same consumer protection framework applies to retail credit lenders as to other regulated lenders including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (CCMA). As such the Central Bank engages with these firms in relation to their treatment of borrowers under the mortgage arrears resolution process as provided for in the CCMA. In particular, the CCMA sets out requirements for all mortgage lenders, including retail credit firms, dealing with borrowers facing or in arrears on a mortgage secured on a primary home and 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 in mortgage difficulty.
The Central Bank has informed me that retail credit firms were also included in the scope of the Central Bank's recent review of the 'Implementation of the Revised CCMA' by mortgage lenders, the purpose of which was to ensure that mortgage lenders achieved full implementation of the requirements of the revised CCMA by end December 2013.
The Central Bank has advised that during 2012, non-bank lenders reported that 59 properties were repossessed following a court order, accounting for 24% of total properties repossessed following court orders. During 2013, non-bank lenders reported that 53 properties were repossessed following a court order, accounting for 15% of the total. In Quarter 1 of 2014, non-bank lenders reported that 9 properties were repossessed following a court order, accounting for 12% of total properties repossessed following court orders.
The Central Bank continues to engage with all mortgage lenders, including retail credit firms, in relation to lenders' mortgage arrears resolution strategies and approaches to dealing with borrowers in or facing arrears. Early and effective engagement between borrowers and lenders is key to resolving cases of mortgage difficulty. Where there is effective and meaningful engagement regarding a mortgage difficulty, the data shows that an increasing number of durable long term mortgage restructures is being put in place.
