Ciarán Cuffe (Dún Laoghaire, Green Party)

I thank the Deputy for the opportunity to speak on this important matter. We are all aware that many Irish people place a high value on owning their own home and of the significant efforts they make to secure and retain their home. This Government is conscious of the high value placed on owning a home and it is our objective from both an economic and social policy point of view to assist those home owners who are in difficulty with mortgage arrears.

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. The Deputy will be aware that in February this year, the Minister for Finance informed the Government of his proposals regarding expanding the membership of the interdepartmental mortgage arrears group, under the chairmanship of Mr. Hugh Cooney. The revamped mortgage arrears and personal debt group's terms of reference, which were approved by the Minister, were incorporated into the supplementary documentation for the Minister's statement on banking delivered to this House on 30 March 2010.

In general, the terms of reference reflect the commitments made by the Government both in the renewed programme for Government and in subsequent Government decisions relating to the issues of mortgage arrears and personal debt. The group has met on a number of occasions and will focus initially on bringing forward recommendations in dealing with mortgage arrears problems while later addressing the personal debt issue. The group will report and make recommendations to the Minister on a rolling basis and submit a final report to the Minister on the mortgage arrears issue by the end of June 2010.

The House will be familiar with the other supports available to protect home owners in difficulty. The Financial Regulator's code of conduct on mortgage arrears, which the Minister has spoken about extensively, requires lenders to wait at least 12 months from the time arrears first arise before applying to the courts to commence enforcement of any legal action on repossessions. The code applies to all regulated lenders on a statutory basis and applies only to mortgage lending activities to consumers in respect of their principal private residence. The main features of the code are early recognition of problems, active management of arrears problems, examination of alternative solutions and repossession as a last resort.

It is important to point out that historically, repossessions in Ireland have been low and a comparison of repossession figures for Irish Banking Federation members who are the mainstream lenders - not including sub-prime lenders - with figures from the UK Council of Mortgage Lenders indicates UK repossession rates per 100,000 mortgages at 30 times those in Ireland. For 2009, total repossessions of homes by legal process for those institutions covered under the bank guarantee scheme was only 28.

In addition to the code, a number of additional measures are in place. In the Minister's Budget Statement in December he refocused mortgage interest relief on those who bought their homes at the peak of the market. Where a home owner's entitlement to mortgage interest relief would expire in 2010 or after, he or she will continue to receive it up to the end of 2017. The mortgage interest subsidy scheme under the supplementary welfare allowance system provides money, subject to a means test, towards the interest payments on a home mortgage. This scheme, which is administered by the community welfare service of the HSE on behalf of the Department of Social and Family Affairs, provides short-term support to help pay mortgage interest repayments where the mortgage relates to a person's principal private residence. The number of people now benefiting from the scheme stands at over 15,000. The scheme is currently under review by the Department of Social and Family Affairs in order to examine ways of improving its operation.

The Government funds the Money Advice and Budgeting Service, which is providing valuable support for those in difficulty. MABS is the main Government-funded service which provides assistance to people who are over-indebted and need help and advice in coping with debt problems. People with debt-related problems should take early action and approach MABS for help and guidance. This can be the first positive step for people in addressing debt difficulties. A new debt protocol agreement has been finalised with MABS and the Irish Bankers Federation, IBF, which provides added reassurance for borrowers with the most difficult issues.

The Irish Bankers Federation, representing the mainstream lenders, published a statement of intent in November 2009 which provides further reassurance to home owners who find themselves genuinely unable to maintain repayments on their principal private residence. The statement of intent 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 also include a representation from the Money Advice and Budgeting Service.

It is also very important to remember that mortgage lending forms a very large part of the balance sheets of Irish financial institutions and mortgage-backed securities are a vital part of their funding activities. For these reasons, the quality of mortgage loans is highly important to the banks commercially. Markets and rating agencies are very sensitive to anything that might appear to damage the quality of the bank mortgage portfolios and this factor must be a prime concern as we consider how best we can assist mortgage borrowers.

We have gone through a very difficult correction in the property market and the Government is fully aware that this has proved hard for many home owners. The Government is confident that the recent measures taken by it, along with the existing supports I referred to, will assist those who are in difficulty with mortgage arrears as a result of unemployment and the economic downturn.

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