Brian Cowen (Laois-Offaly, Fianna Fail)

The Government is proactively seeking to safeguard the interests of households that are experiencing difficulties in making mortgage payments as a result of circumstances beyond their control. Our priority is to ensure, as much as possible, that mortgage arrears do not result in legal proceedings seeking home repossession. The Government has insisted that banks participating in the guarantee scheme confirm their compliance with the Irish Banking Federation's code of practice on mortgage arrears. That detailed and robust code has been operated successfully by banks in Ireland since 2000 on a voluntary basis. The primary purpose of the code is to take every possible step to avoid recourse to repossession proceedings. The code states clearly that in normal circumstances, the lender will not seek repossession of a property until every reasonable step to agree an alternative repayment schedule has been exhausted.

The Deputy spoke about the need to modify repayment schedules to meet new circumstances. I remind him that approximately 7,000 people avail of the mortgage interest supplement scheme. Some 70,000 people are catered for under the rent supplement scheme. The banks are bound by the federation's code of practice, which I have mentioned. Approximately 50 houses were repossessed by mainstream lenders in 2007. More recent statistics on court proceedings involving house repossessions indicate, as the Deputy suggested, that there has been an increase in the number of repossession applications to the courts. Most applications are being made by sub-prime lenders, rather than mainstream banks that have adopted the code of practice on mortgage arrears.

I am concerned about the extent to which some non-mainstream lenders are having recourse to the courts and seeking orders for house repossessions. It is important for the Financial Regulator to urgently explore with such lenders, in the context of the implementation of the requirements of the consumer protection code, the steps that are needed to minimise court interventions that are ultimately not in the interests of lenders or borrowers. There is a strong case for extending the code of practice on mortgage arrears to the small number of mortgage lenders that are not subject to it at present. I will ask the Minister of State with responsibility for housing to take that matter up as a matter of urgency. The Money Advice and Budgeting Service, which has 53 local offices, continues to advise and work with clients on the restructuring of payments. That local resource is open to everyone. I have made the points I wanted to make in response to Deputy Gilmore's question about the repossession schedule.

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