Mortgage Arrears Proposals

Dáil Éireann Debate, Wednesday - 17 April 2019

Wednesday, 17 April 2019

Questions (46)

Bernard Durkan

Question:

46. Deputy Bernard J. Durkan asked the Minister for Finance the steps which can be taken to encourage lenders, directly or through the medium of the Central Bank, when dealing with borrowers in arrears to take into account the willingness of the borrowers to make reasonable repayments in line with their circumstances rather than liquidation, particularly in circumstances in which the family home or small business is concerned; and if he will make a statement on the matter. [17798/19]

Oral answers (11 contributions)

Deputy Bernard J. Durkan

This question seeks to ascertain the extent to which the Minister, whether directly or through the aegis of the Central Bank, can influence the manner in which borrowers in arrears are treated, especially where the borrowers are making realistic payments.

Deputy Paschal Donohoe

As the Deputy will be aware, within the remit of the Central Bank's responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers through a strong consumer protection framework and ensuring that lenders have appropriate arrears resolution strategies and operations in place.

There are clear steps outlined for lenders and how they engage with borrowers in the statutory code of conduct on mortgage arrears, CCMA, that forms part of the Central Bank's consumer protection measures.  There are clear steps for consumer protection, aimed specifically at the process to be followed by relevant firms, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan are treated in a timely, transparent and fair manner. Banks, retail credit firms and credit servicing firms are all required to comply with the CCMA.  There are regulations for firms lending to small and medium enterprises which regulated lenders have been required to comply with since 1 July 2016 and in the case of credit unions from 1 January 2017.

Deputy Bernard J. Durkan

I further seek to ascertain whether it might be timely to visit again the manner in which all borrowers are being treated. There is a vast difference between those who refuse to make any payment and those who are struggling to make payments but are achieving reasonable results. Some lending institutions are surreptitiously offering the properties for sale under the counter. This is not obviously advertised and it puts the borrowers in a very sensitive position, especially at a time when approximately 30,000 borrowers, homeowners and small businesses are the subject of this conversation. I ask the Minister to ensure that the lenders actually do what they say they are doing.

Deputy Paschal Donohoe

We keep this matter under review all the times. As the Deputy will be aware, every quarter we publish all of the different information on the performance of mortgages and how the issue of non-payment of arrears is dealt with. I regularly meet the banks at CEO and chairperson level and I raise these issues at each of these meetings. The Deputy will know that we are making and have made progress with regard to restructuring agreements and that by the end of the fourth quarter of last year, we saw a further 4,251 new restructuring arrangements put in place, bringing the total number of these structures agreed in 2018 alone up to 22,171 restructures. That shows the degree to which these kinds of arrangements are being used to deal with the issues that the Deputy is referring to. I will continue to look at the framework we have in place to ensure that it gets the balance right between treating our citizens fairly and ensuring that we have a banking sector that can meet the needs of all citizens and our economy.

Deputy Bernard J. Durkan

I appreciate the extent of the role and the position that the Minister must have in this situation. However, I am a little concerned, having dealt with many such cases, that the lenders do not always tell the full and true story. I find that, wrapped up in the statistics, can be a multitude of stories which ultimately boil down to individual families and households losing their small businesses or homes and finding themselves thrust out into the marketplace where there is a very severe shortage of housing. As a result, the question that arises is that, when borrowers are making payments in line with their ability today as opposed to their ability a number of years ago, could a special arrangement be entered into or consideration given to such a special arrangement to facilitate this?

An Leas-Cheann Comhairle

I will facilitate a brief question from Deputy Pearse Doherty.

Deputy Pearse Doherty

The Minister obviously does not know what is happening under his nose. Ulster Bank sold a portfolio of more than 2,000 buy-to-lets to Promontoria Scariff. Cabot is administering them. It is appointing a receiver to all of those properties. It is telling them to clear the arrears within 30 days or a fixed asset receiver will be appointed. That means they are taking the asset whether there is negative equity or positive equity. They are not facilitating any arrangements. All of these tenants in these assets will get a notice to quit. This has happened because of the Minister's policy of rolling out the red carpet to the vultures. They can do this because nothing can be legally done to prevent them from doing it. That is happening right now.

An Leas-Cheann Comhairle

Deputy Burton can ask a brief supplementary.

Deputy Joan Burton

Permanent TSB is getting ready, in April and May, to transfer its mortgages to a vehicle that it has sold them to. Like the circumstances that Deputy Durkan is outlining, many families are terrified that they will be forced out of the home on which they are paying three quarters or more of the old mortgage, when it was taken out in 2003 or 2005, at the height of the boom, at very high cost prices. The Minister has to step in to look after these families.

Deputy Paschal Donohoe

I am well aware of what is happening, as Deputy Doherty put it, underneath my nose. I am aware of the number of mortgages that have been successfully restructured.

The number of mortgages in arrears is declining but citizens still face challenges if they find they are in arrears and are worried about their future. This is why we have organisations like Abhaile and the Insolvency Service of Ireland, which have been successful in ensuring that the majority of citizens who find themselves in difficulties stay in their homes. Very few Deputies refer to these when we are acknowledging the difficulties that exist and I rarely hear recognition of the progress that has been made, nor of the protections that are in place.

In respect of loan book sales, I do not have a role to influence or direct banks on how they manage their commercial operations but I have a responsibility to make sure protections are in place for citizens who find themselves in difficult situations. The figures I have shared with the House show how those regulations are working

Deputy Pearse Doherty

What about Cabot Ireland and the thousands of people who are going to be evicted?