Mr. Paul Joyce:

In the short time available, I would like to set out where we are in this regard. Page 1 of the submission contains a number of statistics, the most significant of which, in our view, is the fact that as of the end of 2013, there are 33,500 mortgage accounts on principal dwelling houses that have been arrears for more than two years. These are the intractable and difficult cases for which solutions are currently not being found.

The Department of Finance now provides monthly statistics for the six main lenders under the mortgage arrears resolution process, MARP. Of the 80,000 accounts of those six lenders that have been in arrears for more than 90 days, only approximately 20,000 have been restructured. This means 60,000 have not as of yet been addressed. Of the 20,000 that have been restructured, only two in three are permanent restructures and one in three is temporary. We do not have information on how sustainable those restructures are.

In the last six months of 2013 more than 3,300 new proceedings were brought to enforced security on a mortgage on a principal dwelling house. This indicates a ramping up of repossession activity. The principal instrument protecting borrowers is the Central Bank's code of conduct on mortgage arrears. The code was revised in 2013 to, we believe, the detriment of consumers. The Central Bank devises, amends and clarifies these codes without any parliamentary scrutiny or oversight of which we are aware. A number of consumer organisations made submissions on the revised code of conduct in 2013 to no avail. We wonder whether the Central Bank should take upon itself or be given the power to take upon itself the role of quasi-legislator in terms of attempting to resolve the problem. The code was adverse to borrowers in many respects. It relaxed the requirements in relation to unsolicited contacts with borrowers and allowed for unsolicited personal visits.

There is a fundamental imbalance in the decision-making process. We would like the committee to note the following The 2010 code of conduct on mortgage arrears obliged lenders to look at all the listed alternative repayment options. There is a subtle amendment in the 2013 code that obliges lenders to look only at options which they themselves offer. As such, they get to choose which options from the list they wish to offer. This is the reason for the maddening inconsistency in this regard. There are people waking up this morning lamenting the fact that their mortgage is one particular provider rather than another because there is no consistency in decision-making. This imbalance of power is further emphasised by the fact that the code is lacking in the basic elements of fair procedure.

The borrower does not have an explicit right to details of the lender's full decision-making process in whether an alternative repayment arrangement should be offered. Equally, the appeals mechanism is from the lender's arrears support unit to the lender's appeals board. The further referral to the Financial Services Ombudsman is also lacking in fair procedures and the ombudsman is on record as having stated he will not interfere with the commercial discretion of a lender to offer a restructuring process or not.