Code of Conduct on Mortgage Arrears

Dáil Éireann Debate, Tuesday - 17 January 2017

Tuesday, 17 January 2017

Ceisteanna (64)

Bernard Durkan

Ceist:

64. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that the lending institutions are compliant with a code of conduct in respect of mortgage arrears that recognises the efforts made by borrowers who continue to make payments within their capacity now and over the period since the economic crash; if this is reflected in the manner in which they deal with customers, many of whom continue to make huge sacrifices to make repayments; his plans to introduce specific guidelines governing the repossession of the family home where lending institutions tend to resort to measures more protective of their own interests, often with tragic consequences; and if he will make a statement on the matter. [41581/16]

Freagraí scríofa

Minister for Finance

The Deputy will be aware that  the Code of Conduct on Mortgage Arrears (CCMA) sets out statutory requirements for mortgage lenders and credit servicing firms dealing with borrowers in or facing arrears on the mortgage loan secured by their primary residence.   Lenders may only commence legal proceedings for repossession of the borrower's primary residence after it follows a number of steps.  The steps include:

- making every reasonable effort under the CCMA to agree an alternative restructure arrangement (ARA) with the borrower;

- time bound requirements to inform the borrower the regulated entity is not willing to offer an ARA and of his/her options;

- time bound requirements to inform a borrower, who is not willing to enter into an ARA, of his/her options; and

- a decision to classify the borrower as non-cooperating. 

I am informed by the Central Bank that there is a broad range of available restructures offered and delivered by both bank and non-bank entities and there is strong evidence that both banks and non-banks look to exhaust available restructure options before moving to the legal process.

I would like to draw the Deputy's attention to the Mortgage Arrears and Restructures Data released by the Central Bank on 12 December, which shows that to end-Q3 2016, the number of mortgage accounts in arrears for principal dwelling houses (PDH) has declined for the last thirteen quarters.  121,140 PDH accounts were also classified as restructured, of which 88% were reported to be meeting the terms of their arrangement.   

The Deputy may also be aware of the recent establishment of the Abhaile mortgage arrears resolution service, established to ensure that those either in mortgage arrears or at risk of going into mortgage arrears on their primary residence are able to access State-funded professional legal or financial advice on their resolution options.  Where a borrower actively engages with their lender it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home.  I would urge borrowers in arrears, who have not already done so, to contact their lender or MABS for an independent assessment of their situation and professional advice on available resolution options.