The Government is conscious of the difficulties some homeowners are facing in meeting their mortgage commitments. In accordance with the conclusions of the Inter-Departmental Report on Mortgage Arrears, the key focus of attention is on the development of measures to assist people who are having genuine difficulty in meeting their mortgage payments as opposed to providing assistance for people currently experiencing negative equity.
The Deputy will be aware of the range of measures currently being advanced to address this mortgage arrears problem. The Central Bank is engaging with all regulated mortgage lenders on their mortgage arrears resolution strategies project. The objective of this engagement is to ensure that each lender has an effective strategy and plan for dealing with its mortgage customers who are, or who are likely to be, in difficulty.
The Deputy will be aware that the Interdepartmental Report on Mortgage Arrears indicated that the reform of personal insolvency legislation is a central catalyst to the resolution of the mortgage arrears problem. In particular, it indicated that new non-judicial debt settlement arrangements are vital to address the problem. The personal insolvency proposals are not intended to address the issue of negative equity but to resolve the issue of insolvent debtors in a fair and effective manner.
The Bill remains a legislative priority for the Government and the timeframe for publication of the Bill is now the end of June next and the Minister for Justice, Equality and Defence has indicated a strong intention to commence Second stage prior to the Summer recess to facilitate early passage of the legislation through the Oireachtas in the Autumn session.
A draft general scheme of a Bill was published by the Minister for Justice at the end of January for consultation and a number of submissions were received in response including from some financial institutions. However, there have also been advances made to allow people currently experiencing negative equity to access new mortgages. The Deputy may wish to note that in a recent speech given by Mr. Matthew Elderfield, the Deputy Governor of the Central Bank said that the Central Bank agreed in late 2010 that two lenders could develop negative equity mortgages on a pilot basis. In light of the limited take-up of these mortgages the Central Bank decided to adapt its approach to make provision of negative equity mortgages easier. The Central Bank has set out for lenders general criteria under which it will consider allowing the provision of such mortgages. The Central Bank has not set prescriptive standards in these areas but will look to see that lenders are taking a reasonable and controlled approach. All such sales however must also comply with the affordability and suitability provisions set out in the Consumer Protection Code.
