Dáil Éireann Debate, Wednesday - 3 December 2014
53. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which family home owners with mortgage arrears are accommodated by lending agencies to a similar extent to the support and tolerance the taxpayer through the State offered to the lending institutions in the bailout; the extent to which his Department continues to encourage such development; and if he will make a statement on the matter. [46518/14]
View answerThe fair resolution of the mortgage arrears problem is a key priority for Government and a comprehensive strategy, in line with the main recommendations of the 2011 Keane Report, has been developed. The implementation of this strategy is overseen at Government level by the Construction 2020, Housing, Planning and Mortgage Arrears sub-committee which is chaired by the Taoiseach.
The Government has significantly advanced a number of key measures in this regard, including:
1. An intensification by the Central Bank of its engagement with mortgage lenders to require them, under the Mortgage Arrears Resolution Targets (MART) process, to propose and conclude sustainable and durable alternative arrangements to their customers in mortgage arrears of greater than 90 days;
2. Significant reforms to personal insolvency and the establishment of the Insolvency Service of Ireland, to make it more accessible for people with unsustainable personal and mortgage debt to address their position;
3. Updating the Code of Conduct on Mortgage Arrears to provide safeguards to cooperating borrowers while also promoting and encouraging efforts by both lenders and borrowers to meaningfully address mortgage arrears or pre-arrears;
4. Mortgage to rent which is now available as a social housing response to allow people to remain in their house, where possible; and
5. The provision of an independent mortgage information and advice service.
The Central Bank's Code of Conduct on Mortgage Arrears (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 borrowers in arrears. 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 their 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 monthly mortgage restructures and arrears data published by my Department also provides an impetus for those MART banks to increase the pace of provision of mortgage restructures. The Department's latest publication, with data for the end of September 2014, shows that the number of principal dwelling home or PDH mortgage accounts in arrears of greater than 90 days has fallen by over 2,000 accounts in the month to 67,854 accounts. In addition, the publication showed that total PDH mortgage accounts in arrears were now below 100,000 for the first time since the financial crisis.
Taken together, the framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations. However, 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.
