Mr. Noel Brett:

The Deputy asked how many people are in arrears. Some 120,739 private dwelling houses have had restructured arrangements put in place. According to the most recent figures from the Central Bank, 86.5% of them are meeting the terms of their arrangements in full.

The Deputy asked about the mortgage-to-rent scheme, which a number of other members also highlighted. It might be interesting to ask the Department and the Housing Agency to brief the committee regarding their perspective on the scheme. Our lenders are extremely keen on the mortgage-to-rent scheme. It is a good solution for eligible families and mortgage holders, lenders and the State. It keeps families in their houses, children close to their local schools and stops people from having to move. As well as the social inclusion aspect, it makes financial sense for the lender and for the individual and their family.

We have had much engagement with the Citizens Information Board, the Department and the Housing Agency, particularly with people such as Claire Feeney, Nina Murray and Angela Black, and have ironed out many of the early problems. For example, there are difficulties with people who do not want to be in the scheme and, in the early stages, banks referred several cases which turned out to be ineligible. Although we got off to a good start with many referrals, as the system worked through them - the mortgage-to-rent scheme is run by the State - cases were terminated. Reasons for which cases were terminated included: ineligibility; a borrower who would not agree or who changed his or her mind about the process; a change in borrower circumstances; and the failure by the approved housing body and the lender to agree on price. For example, the lender and the housing body would carry out a valuation on the property and the two might be a long way apart. The lender is in a legal bind in that it is obliged to get the highest value it possibly can for the mortgage holder, given that it will hold the residual debt. There has been much progress and now there is one agreed valuation, which will speed up the process.

Lenders are very keen on the scheme, which is much more efficient. Going through the legal process and taking possession of somebody's house has to be a last resort. It is an extremely costly and protracted process, and is not the best outcome for the mortgage holder and his or her family or for the lender. We would like even more push through into the mortgage-to-rent scheme. There may be a challenge for the State in providing funding for it. The State is buying those properties at a reduced price, keeping the families in them and applying the mortgage-to-rent scheme. There may be issues for the State regarding how much funding it is prepared to put into the scheme. The lenders have moved a long way in terms of the house valuations and prices.

Some people raise issues and concerns regarding the mortgage-to-rent scheme. There is a view that people can move up a housing list by virtue of being in the scheme. This is a social policy issue, not a banking issue. We have much better processes in place in each of the individual lenders, and the latter are making referrals. It would be interesting for the members to hear the other side of the equation, namely, what the Department and the Housing Agency think. We should maximise the scheme and use it much more. It is a good scheme.

There were many teething problems around valuation and the process.

The scheme is closing its cases at a much quicker rate mainly due to better conveyancing processes at some of the banks. In the early days, there was a lot of disagreement about the value of houses. The lender had a value, the person who had the mortgage had another value in his or her mind, the AHB would be in the middle and never the twain would meet. The move to one agreed valuation clearly removes that block and that is significant. We are grateful for the engagement we have had with State agencies to move that on.

The key issue with mortgage availability has to be ability to repay and there is no point in indebting people who do not have the ability to repay. I agree a track record of paying rent clearly demonstrates a person is able to pay over a sustained period often higher amounts than a mortgage repayment for a similar property and often higher than a mortgage repayment with some stress on it, such as future interest rate increases. The key issue has to be ability to repay under stress. Bank lending rules, in as much as they can, take account of proven ability to repay. I am conscious that the Deputy said the committee would have engagement with the Central Bank and this may be an issue that should be discussed with its officials in the context of the macroprudential rules.

The sale of distressed mortgages to investors or other forms of------