Dáil Éireann Debate, Tuesday - 18 December 2012
193. Deputy Michael Healy-Rae asked the Minister for Finance if he will intervene to try and help young couples who are struggling to pay their mortgages; his further views on whether mortgages should be reduced to reflect the now much lower valuation of the property as against the high price paid for the houses during the boom; and if he will make a statement on the matter. [56957/12]
Amharc ar fhreagraI can assure the Deputy that the Government is aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing genuine difficulty. From an overall public policy perspective, a number of steps have been taken to protect all homeowners experiencing mortgage difficulty. The Central Bank’s Code of Conduct on Mortgage Arrears is a key protection and provides that each bank must put in place a formal Mortgage Arrears Resolution Process to deal with its mortgage customers who are in arrears or pre-arrears and for the establishment of dedicated arrears support units and appeals processes to handle such cases. The Code highlights the importance of a borrower contacting their lender when they are in arrears or pre-arrears. The Central Bank has published a guide for consumers on mortgage arrears called ‘Mortgage Arrears – A Consumer Guide to Dealing with your Lender’ and this is available on the Central Bank website: http://www.centralbank.ie/regulation/processes/consumer-protection-code/Documents/Consumer%20Booklet%20-%20FINAL%20Feb%202011.pdf .
In addition, the Government is now actively implementing the main recommendations contained in the ‘Keane Report’ and a number of significant milestones have now been achieved:
- The Personal Insolvency Bill, which was published last June by the Minister for Justice, Equality and Defence, has now concluded in the Seanad and is returning to the Dáil this week;
- The Minister for Housing and Planning has formally launched the “mortgage to rent” scheme on a nationwide basis;
- Lenders have provided details to the Central Bank on their proposed forbearance and loan modification options which will be made available, in appropriate cases, to their customers who are in mortgage difficulty. The roll out of these options has commenced with Central Bank oversight;
- An extensive independent mortgage advice framework has been put in place by the Minister of Social Protection comprising (i) an enhanced website www.keepingyourhome.ie (ii) a Mortgage Arrears information helpline and (iii) the provision of free independent ‘one-to-one’ professional financial advice to borrowers when considering a long term forbearance/resolution offer from their lender.
The Government, therefore, is proceeding along the lines of the general recommendations set out in the ‘Keane Report’ which indicated that the primary focus should be on those mortgage holders who are experiencing significant repayment difficulty or who are in an unsustainable situation. The Report did not consider a blanket debt write off approach, either to write down the amount of negative equity that may exist in residential mortgages or otherwise, to be an appropriate response to the mortgage problem. It was indicated that such an approach would be a very inefficient way to tackle the real problem and would impose significant further losses which could not be afforded by taxpayers or society at large. While unfortunately the latest Central Bank statistics indicate that the number of mortgages in arrears continues to rise, it must nevertheless also be noted that the significant majority of mortgage holders continue to meet their mortgage commitments.
Ultimately the Government is of the view that it is the regeneration of the economy, the restoration of employment levels and income growth that will address the real social and economic problems associated with high levels of mortgage and personal indebtedness. That is why Government is focussed through its many new initiatives at fostering and generating economic growth. The successful achievement of this objective will restore consumer confidence and bring the tangible and sustainable recovery that the country requires.
