In common with my colleague the Minister for Finance, who has responsibilities in this area, I have no plans to purchase distressed loans from commercial banks.
As Minister with responsibility for housing, I am sensitive to the interests of families faced with mortgage difficulties. Building on measures introduced by the last Government, the Programme for a Partnership Government commits to considering further appropriate actions in this area and on the broader issue of over indebtedness.
The Approved Housing Body (AHB) Mortgage to Rent Scheme was launched nationally in June 2012. It is a Government Initiative to help homeowners who are at risk of losing their homes due to mortgage arrears. The scheme is an option for people who have been exited from the Mortgage Arrears Resolution Process (MARP) with their lender due to their mortgage being deemed unsustainable. It is now properly established as part of the overall suite of social housing options and an important part of the arrears resolution process.
The package of commitments on mortgage arrears announced by Government in May 2015 included a number of amendments to the Mortgage to Rent Scheme which will enable more properties to qualify, and make it more flexible and accessible to borrowers. Amendments made with effect from July 2015 include raising the valuation thresholds for properties, flexibility in relation to the size of properties, more efficient assessment of a borrower’s eligibility for social housing support and flexibility to allow cases of marginal positive equity to avail of the scheme. Additional financial support has been made available by increasing the ceiling of support under the Capital Advance Leasing Facility (CALF) for MTR cases from 30% to 40%.
My Department continues to keep the operation of the Mortgage to Rent Scheme under review.
In addition, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which comes into operation on 1 July 2016.
Further, the Code of Conduct for Mortgage Arrears provides protections for borrowers who endeavour to meet their commitments in relation to their mortgages and the 2015 Act ensures that these protections apply when a loan has been sold.
