Seán Haughey (Dublin North Central, Fianna Fail)

The Minister for Finance may share some of my time. On behalf of the Government, I thank all the Deputies for their contributions to this debate.

The provisions contained in the code of conduct on mortgage arrears still seem to be confusing to some Deputies nine months after the statutory code was introduced. The code requires a lender to wait at least six months from the time arrears first arise before applying to the courts to commence enforcement of any legal action on repossession. In the case of AIB and Bank of Ireland, which have been recapitalised by the State, the moratorium period has been extended to 12 months for the duration of the subscription agreement. This means that if a homeowner falls into arrears on 1 November 2009, the lender must wait at least six months from that date, or 12 months in the case of AIB and Bank of Ireland, before commencing enforcement of legal action. The suggestions made by Deputies that the moratorium will run out in February 2010 are wide of the mark. I stress that the code gives borrowers important legal rights, and the borrowers should not hold back from getting in touch with their lenders if they get into difficulty.

Deputies were informed in the House yesterday that the proposal to extend the moratorium to 24 months has real potential to cause serious funding problems for Irish banks and, ultimately, for the State itself. International credit markets are a source of funding for the Irish banks and these markets are fully aware of the exposure of Irish banks to the residential mortgage market. It is very important not to give the message to funding markets that it is somehow acceptable to default on a mortgage in Ireland. It is also important to state that the Minister has been reassured by the guaranteed banks that they are not intending a campaign of repossessions against homeowners who are in arrears.

I will share the remainder of my time with the Minister, Deputy Brian Lenihan.

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