I assume that the Deputy is referring to the report of the Mortgage Arrears and Personal Debt Group (Cooney Report) which was published in November 2010. One of the recommendations of the Group was that lenders should offer a Deferred Interest Scheme (DIS) to borrowers. Under this Scheme, subject to certain criteria being satisfied, borrowers are allowed to pay at least 66% of their mortgage interest but less than 100%. Payment of the balance may be deferred for up to 5 years. Lenders representing the majority of the market have already implemented (or indicated their willingness to implement) the Group's proposals for a DIS or a variation of it. While the Scheme is voluntary for all lenders, those who have signed up in support of the Scheme will be monitored by the Central Bank to ensure compliance.
Since the publication of the Group's Report, the Code of Conduct on Mortgage Arrears (CCMA) has been revised by the Central Bank to reflect many of the Group's recommendations, including key recommendations relating to the introduction by all lenders regulated by the Central Bank of a standardised Mortgage Arrears Resolution Process (MARP). The most significant changes in the revised CCMA include
penalty interest charges may not be imposed on borrowers in arrears who co-operate with the MARP,
harassment of borrowers through unsolicited communication is outlawed,
borrowers in financial difficulties, but not in arrears, are allowed to come under the MARP,
when determining the 12 month period the lender must wait before applying to the courts to commence legal action, the lender must exclude any time period during which the borrower is complying with the terms of an alternative repayment arrangement, making an appeal to the internal appeals board or making a complaint to the Financial Services Ombudsman.
The revised CCMA came into effect on 1 January 2011 and can be accessed at www.centralbank.ie. Lenders are required to comply with the CCMA as a matter of law. With effect from 30 June 2011, lenders must have in place the requisite systems and trained staff necessary to support the implementation of the MARP.
A new Working Group has been established under the Economic Management Council. Its remit is to consider the state of implementation of the main recommendations of the Cooney Report and to develop further necessary actions to alleviate the mortgage over indebtedness problem. The Government will consider what further action is warranted once the Group has concluded its deliberations and reported to the Economic Management Council. I expect that the Group will complete its work in the very near future.