I propose to take Questions Nos. 94, 96 and 97 together.
The Deputy will be aware that regulated lenders are required under the Code of Conduct on Mortgage Arrears (CCMA) to have in place a Mortgage Arrears Resolution Process as a framework for handling cases in mortgage arrears or at risk of falling into arrears. Under MARP, a lender must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including:
- the personal circumstances of the borrower;
- the overall indebtedness of the borrower;
- the information provided in the standard financial statement;
- the borrower's current repayment capacity; and
- the borrower's previous repayment history.
The Central Bank established mortgage arrears resolution targets (MART) in 2013 for six Irish mortgage credit institutions (ACC Bank plc, Allied Irish Bank plc, The Governor and Company of the Bank of Ireland, KBC Bank Ireland plc, Permanent Tsb plc and Ulster Bank Ireland Limited) with respect to their Republic of Ireland principal dwelling home primary residence (PDH), and buy-to-let (BTL) mortgagees. All financial institutions subject to MART were required to report progress to the Central Bank regarding their achievement of MART targets, including the concluded sustainable solutions target. At end Q4-2014, the Central Bank reported that lending institutions had met the Central Bank requirements in respect of concluded sustainable solutions.
The Deputy should also be aware that the Central Bank published internal sustainability guidelines in 2013, updated in 2014, to guide supervisors in assessing if the modifications provided by lenders are sustainable solutions for mortgage arrears cases.
In April 2015 the Central Bank determined that relying on common quarterly resolution targets across all banks was no longer appropriate and wrote to each institution setting out new requirements that:
- concluded sustainable solutions are in place for the vast majority of distressed borrowers by the end of 2015;
- they meet the target of 75 per cent of concluded solutions to the end of 2015 and beyond;
- they continue to comply with the Code of Conduct on Mortgage Arrears;
- where they take legal action that may result in loss of ownership for a borrower, they should be prepared to re-engage with the borrower and explore alternative solutions if the borrower re-engages; and
- they engage fully and appropriately in the process set out in the Personal Insolvency Act, 2012.
I am informed by the Central Bank that it has always focused on providing a fair and consistent process for the borrower through the CCMA, the Consumer Protection Code 2012, the MART audits and against defined Sustainability Guidelines.
As the Deputy is aware, the CCMA has already been reviewed and updated over time and the Government will work with the Central Bank to ensure that the Code continues to be relevant, fair and balanced in respect of the legitimate interests of debtors and creditors, all the while promoting the availability of sustainable solutions to address genuine mortgage difficulty.
