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Mortgage Resolution Processes

Dáil Éireann Debate, Thursday - 29 November 2012

Thursday, 29 November 2012

Ceisteanna (73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83)

Gerald Nash

Ceist:

73. Deputy Gerald Nash asked the Minister for Finance the names of the institutions participating in the mortgage arrears resolution process and the dates from which they accessed the scheme. [53682/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

74. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications received under the mortgage arrears resolution process to the last day in October 2012 or the date at which the most recent statistics per participant institution are available. [53683/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

75. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications approved under the mortgage arrears resolution process, the application is admitted under the MARP, and processed by the arrears support unit to the last day in October 2012 or the most recent quarterly reporting date, per participant institution and their placement under the following headings of restructuring, interest only, reduced payment greater than interest only, reduced payment less than interest only, term extension, arrears capitalisation, payment moratorium, hybrid, deferred interest scheme, and any other headings applied in the process; and if he will make a statement on the matter. [53684/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

76. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications refused or declined by the arrears support unit to the last day in October 2012 or the most recent quarterly reporting date, per participant institution; the rationale for refusal under the following headings of refusal/decline, unsustainable, sufficient income, sufficient ancillary assets and any other headings applied in the process; and if he will make a statement on the matter. [53685/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

77. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications which were refused or declined by the arrears support unit to the last day in October 2012 or the most recent quarterly reporting date, per participant institution where appeals have subsequently been lodged to the institutions internal appeals board. [53686/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

78. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications approved under the mortgage arrears resolution process, that is where the application is admitted under the MARP internal appeal structure to the last day in October 2012 or the most recent quarterly reporting date, per participant institution and their placement under the following headings of restructuring, interest only, reduced payment greater than interest only, reduced payment less than interest only, term extension, arrears capitalisation, payment moratorium, hybrid, deferred interest scheme, and any other headings applied in the process; and if he will make a statement on the matter. [53687/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

79. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications refused or declined under the mortgage arrears resolution process, that is the applications is not to be admitted under the MARP internal appeal structure to the last day in October 2012 or the most recent quarterly reporting date, per participant institution and their placement under the following headings of refusal/decline, unsustainable, sufficient income, sufficient ancillary assets and any other headings applied in the process; and if he will make a statement on the matter. [53688/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

80. Deputy Gerald Nash asked the Minister for Finance the cumulative number of applications refused or declined under the mortgage arrears resolution process internal appeal structure per participant institution which were subsequently appealed to the Office of the Financial Services Ombudsman; the number of such decisions that were either upheld or refused by the that office; and if he will make a statement on the matter. [53689/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

81. Deputy Gerald Nash asked the Minister for Finance the guidance or other interpretative application material that has been provided by those institutions who are participating in the mortgage arrears resolution process scheme to borrowers to assist those borrowers making applications to appeal decisions made by the Arrears Support Unit to the internal appeals structure which have been provided; the participating institution(s)in the scheme that are producing and providing such information; and if he will make a statement on the matter. [53690/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

82. Deputy Gerald Nash asked the Minister for Finance the number of reports, reviews, audits, enquiries or other interventions, including the nature of such intervention, for example oral or written which have been made by the Central Bank of Ireland with regard to the operation of the mortgage arrears resolution process scheme and the number of such interventions, per participating institutions to the last day of October 2012 or to which date such data is available; and if he will make a statement on the matter. [53691/12]

Amharc ar fhreagra

Gerald Nash

Ceist:

83. Deputy Gerald Nash asked the Minister for Finance his plans to review the operation of the mortgage arrears resolution process scheme; if will he consider appointing representatives of the legal profession, including the providers of free legal advice services, consumer interests, voluntary sector housing providers, and providers of information and advocacy services in the voluntary sector housing to any review; and if he will make a statement on the matter. [53692/12]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 73 to 83, inclusive, together.

The Central Bank has informed me that it does not track the number of borrowers falling within the MARP process but does track the number of alternative arrangements, and the nature of the arrangement, put in place across the regulated industry and which is published quarterly by the Central Bank. The Central Bank Code of Conduct on Mortgage Arrears, the current version of which came into effect from 1 January 2011, was issued under the provisions of section 117 of the Central Bank Act 1989. The Code applies to the mortgage lending activities of all entities regulated by the Central Bank, except for credit unions, in respect of loans which are secured by the borrower’s primary residence. The Code sets out the framework within which a regulated mortgage lender must engage with a borrower who is in arrears, or pre-arrears, in respect of a loan secured on the borrower’s primary residence and who is co-operating with the lender.

This revised Code sets out new and more detailed requirements that a lender must comply with when dealing with mortgage holders experiencing genuine arrears and financial difficulties. In particular, it provides that each lender must establish a Mortgage Arrears Resolution Process (MARP) and use this framework when dealing with its mortgage holders experiencing difficulty. This framework provides for a number of steps such as:

- communication with borrowers;

- the use of a standard financial statement to obtain financial information;

- assessment of the customer’s circumstances by dedicated arrears support units;

- resolution, which require the lender to explore all options for an alternative repayment arrangement in order to determine the most viable option in each case, and

- an appeals process, which initially will be an internal Appeals Board within the institution, to reconsider the matter if the borrower is not satisfied with the proposed resolution response. There is then the further option if necessary, to appeal to the Financial Services Ombudsman after the internal appeal process has ended.

MARP, therefore, is not a scheme as such but rather is a process put in place to govern the interaction between mortgage borrower and lender in circumstances where the former is experiencing genuine difficulty and allows both parties to assess the current situation with a view to coming to an optimal solution. In particular, a lender is required to explore all options for an alternative repayment arrangement to determine which options are viable for each particular case.

Other protections offered to borrowers under the CCMA include the following:

- all cases must be handled sympathetically and positively by the lender;

- a lender must not apply to the courts to commence legal action for repossession until every reasonable effort has been made to agree an alternative repayment arrangement with the borrower;

- where a borrower co-operates with the lender, the lender must wait at least 12 months from the date the borrower is classified as a MARP case before applying to the courts to commence legal action;

- each branch or office of the lender must have one person responsible for dealing with borrowers in difficulty and must also have a dedicated Arrears Support Unit to deal with all MARP cases;

- lenders are restricted from imposing charges on arrears arising on a mortgage account in arrears where the borrower is co-operating with the lender;

- all communications about arrears and pre-arrears must be provided in a timely, clear and consumer friendly manner, e.g. information booklet providing details of MARP and dedicated section on website.

Quarter 2 2012 Mortgage Arrears Stats published in August shows the number of mortgages secured on Private Dwelling Homes (PDH’s) which are in arrears. This is also broken down into restructured number and type. http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2012q2_ie_mortgage_arrears_statistics.pdf. The publication of Quarter 3 data is expected in mid-December, will also include information on Buy to Let properties for the first time.

Regarding complaints to the Financial Services Ombudsman, I am informed by that Office that it introduced a policy last April in response to a number of complaints being submitted to his Office regarding mortgage arrears/pre arrears, to deal with such cases. This policy states that a complainant must first engage with the financial institution in question and fully exhaust the MARP process. The Financial Services Ombudsman will not investigate such complaints where the MARP process has not been exhausted. This gives both parties the opportunity to re-engage with the process and find, where possible, an alternative resolution. If a complainant uses the MARP process, with either party failing to come to a resolution, the complainant can revert back to the Financial Services Ombudsman. In that regard, the above procedure has proved relatively successful as it ensures that the respective parties engage with one another, before referral to the Ombudsman’s Office. However, there have been cases where MARP has been exhausted, and the Ombudsman followed up by investigating such complaints. Thus far, there have been 6 not upheld, with 5 partly upheld. There have been no cases where the Ombudsman fully upheld such a complaint.

The Central Bank also informed me that a review of lenders compliance with the CCMA was carried out by it in 2011, focussing on charges imposed by lenders. Please see a link to the Press Release on the outcome of this review below. http://www.centralbank.ie/regulation/processes/consumer-protection-code/compliance-monitoring/Documents/Information%20Release%20-%20Lenders%20Compliance%20with%20the%20Revised%20CCMA%2001%20July%202011.pdf

Also attached, for information, is a link to the CCMA and the Central Bank’s Consumer Guide to dealing with your lender below.

http://www.centralbank.ie/regulation/processes/consumer-protection-code/Documents/Code%20of%20Conduct%20on%20Mortgage%20Arrears%20%201%20January%202011.pdf

http://www.centralbank.ie/regulation/processes/consumer-protection-code/Documents/120511%20Consumer%20Booklet%20-%20Final%20May%202012.pdf

The Central Bank has informed me that it will commence a review of the Code of Conduct on Mortgage Arrears in the first quarter of 2013. The Central Bank would normally conduct a review following a reasonable time after implementation and the Code will require updating due to the introduction of the Personal Insolvency Arrangement insolvency framework as provided for in the Personal Insolvency Bill which is currently before the Oireachtas as well as longer term mortgage resolution options. The review will take into consideration recent developments that may be relevant to the issue of mortgage arrears.

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