Dick Roche (Wicklow, Fianna Fail)

The code of conduct on mortgage arrears, which was published by the Financial Regulator last February, applies to all regulated lenders on a statutory basis and replaces the earlier voluntary code operated by mainstream lenders. The code applies only to mortgage lending to consumers in respect of their principal private residences in Ireland.

The main features of the code are early recognition of problems - as soon as even one payment is missed, lenders must communicate with the borrower to establish why the repayment schedule has not been adhered to and how the situation may be rectified; active management of arrears problems - a plan for clearing the mortgage arrears can be developed that is consistent with the interests of both lender and borrower and takes into consideration all viable options open to the borrower; examination of alternative solutions - the lender must explore with the borrower alternative repayment measures, including changing the monthly repayments to help address the arrears situation; and the use of repossession only as a last resort - the lender must not seek repossession of the property until every reasonable effort has been made to agree an alternative repayment schedule with the borrower.

It is important to emphasise that the code is not due to expire at the end of the month, as the Deputy appeared to suggest. 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, so there is no deadline looming after which this protection will expire. In the case of Bank of Ireland and AIB, both of which have been recapitalised by the State, this period has been extended to 12 months, also from the time arrears first arise, for the duration of the recapitalisation subscription agreement. As a further measure, the Minister has been in touch with the Financial Regulator to request that consideration be given to extending the moratorium on mortgage arrears from six to 12 months for all mortgage lenders.

The Irish Banking Federation, representing the mainstream lenders, published a statement of intent in November 2009 which provides further reassurance to homeowners who find themselves genuinely unable to maintain repayments on their principal private residence. The statement has been agreed and supported by all IBF members and is a welcome development. It is also welcome that the IBF oversight committee on the implementation of the statement of intent will include a representative from the Money Advice and Budgeting Service, MABS.

The House will be aware that there have been a number of developments relating to the Government's commitments in the renewed programme for Government dealing with protecting the family home and helping those in debt. In particular, I refer to the recent Government decisions on matters relating to indebtedness and mortgage arrears and also personal debt management and enforcement. Work has commenced on bringing forward options for dealing with these matters. In his budget speech the Minister refocused mortgage interest relief on those who bought their homes at the peak of the market. Where a homeowner's entitlement to mortgage interest relief was to expire in 2010 or after, he or she will now continue to receive it up to the end of 2017.

In addition to the code of conduct on mortgage arrears, a number of additional support measures are in place, including the mortgage interest subsidy scheme, of which the Deputy will be aware. The Government also funds MABS, which provides valuable support for families in difficulty. MABS is the main Government-funded service which provides assistance to people who are over-indebted and need help and advice in matters relating to debt management. A new debt protocol agreement has been finalised with MABS and the Irish Banking Federation which provides added reassurance for borrowers with the most difficult issues.

Historically, repossessions in Ireland have been low. A comparison of repossession figures from mainstream IBF members - that is, not including sub-prime lenders-----

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