Dáil Éireann Debate, Thursday - 13 July 2017
148. Deputy Michael McGrath asked the Minister for Finance the number of residential mortgages classified as sub prime; the number of sub-prime lenders currently operating in the market; the 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. [33783/17]
View answer198. 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 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. [34291/17]
View answerI propose to take Questions Nos. 148 and 198 together.
The Central Bank advises that there is no such regulated category as “sub-prime lender”. However, Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals and some firms authorised in this category provide housing loans. Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008 and a register of all Retail Credit Firms is available on the Central Bank website at the following link:
http://registers.centralbank.ie/DownloadsPage.aspx .
Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but they are subject to the same Consumer Protection framework requirements including the Central Bank’s statutory Consumer Protection Code and Code of Conduct on Mortgage Arrears (‘CCMA’).
The CCMA - https://www.centralbank.ie/docs/default-source/Regulation/codes/gns-4-1-7-2013-ccma.pdf?sfvrsn=4 - sets out requirements for all mortgage lenders, including Retail Credit Firms, dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their primary residence. It 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 experiencing mortgage difficulty.
The Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow:
Step 1: Communicate with borrower;
Step 2: Gather financial information;
Step 3: Assess the borrowers' circumstances; and
Step 4: Propose a resolution.
The Central Bank’s Residential Mortgage Arrears and Repossessions Statistics provides detailed data on the number and performance of ‘Residential Mortgages held by Non-Bank Entities’. The most recent available data, which relates Q1 2017, is attached and the information on "non-bank" entities is set out in tables 4 and 5 - https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/2017q1_ie_mortgage_arrears_statisticse2a9c5134644629bacc1ff0000269695.pdf?sfvrsn=8.
