Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The role of the cabinet sub-committee on mortgage arrears was to oversee the effect of implementation, on a cross-departmental basis, of the Government's response to the issue of mortgage arrears; to agree a detailed implementation plan for the recommendations of the interdepartmental report on mortgage arrears, which was published; to ensure appropriate priority was given to the delivery of this implementation plan across Departments and agencies; and to develop any further measures in relation to mortgage arrears required in light of the developments. Outside the sub-committee, we had a number of meetings with the banks where the issue of mortgage distress and arrears was discussed at some length.

Deputy Ó Fearghaíl is aware that the deputy governor of the Central Bank, Mr. Matthew Elderfield, regulates the operation of the banks. He has been clear and forthright in what he has required from them. Deputy Ó Fearghaíl is also aware that I wrote formally to the regulator last year to say that if he required any further legislative authority the Government would consider giving it to him.

The regulator responded that he did not consider it necessary at this time to seek any further powers.

The Government's work is focused on four areas, including resolution strategies by the banks in respect of mortgage arrears and distressed mortgages. This has fluctuated in terms of those who are unable to pay over the 90 days or the 30 days, as the case may be. The complex legislation dealing with the Insolvency Bill, starts Report Stage in the House today and, at the same time, there is the development in parallel to the Bill of the insolvency service of Ireland. The new director has already taken up office and has advertised for competent staff from the Department of Justice and Equality. He has the support of the Central Bank regarding the framework or the strategy he must put in place and in regard to responses to advertisements for accountants and legal personnel who will be required to do that. Third, and most importantly, the Government is focused on keeping families in their homes. What better news can a family have in challenged times where one or two might have lost a job or fallen on difficult times that a resolution has been arrived at or agreed in terms of their mortgage position? The banks did not have trained personnel in the last number of years to deal with these individual cases. That matter is now rectified. Banks have trained personnel to sit down with individuals who have a difficulty with their mortgage, be it arrears or a business that is thriving but is being pulled down by having entered the property market. Fourth, comprehensive advice and guidance is being provided by the Minister for Social Protection, along with the Citizens Advice Bureau. A comprehensive mortgage information and advice service available is online which addresses all those key issues and provides necessary support in advising people who have mortgage distress. This is available at www.keepingyourhome.ie. The mortgage arrears information helpline has been available since last July and the independent mortgage arrears advice service was launched by the Minister for Social Protection on 6 September.

Further, the Central Bank, as the regulator of credit institutions, asked all mortgage lenders to prepare and submit to it mortgage arrears resolution strategies and implementation plans. Following the receipt of those plans, the Central Bank commenced an in-depth engagement process with the lenders on their plans. It is not sufficient for banks merely to arrive at a solution by saying it is putting people on interest only arrangements or kicking matters down the line. That does not deal with the problem and they know that. It is a case of each lender having an effective strategy to deal with each individual circumstance because, as the Deputy knows from his constituency, his county and his business, all these circumstances are different. The fact is that banks now have trained personnel to deal with each individual case, be it restructuring of a small and medium enterprise loan, the case of a business that is being dragged down by property or a residential mortgage in distress or arrears. The banks had to refine their proposals and commit to the Central Bank to build on existing forbearance solutions so they can extend the range of options open for people to sort these things out. There are split mortgages and trade down mortgages, restructuring of mortgage repayments and forbearance. Those have been piloted by the banks. I am not happy it is moving fast enough, although when I speak to some bank personnel they point to several thousand of these mortgage holders having arrived at an agreeable solution with those involved. I am not happy that many of these are merely putting people on interest only payments for the next six or 12 months. We must arrive at a solution because they are still in the system. From that point of view, the regulator, whom I met yesterday at the Cabinet sub-committee dealing with this, is moving on to the different sectors that apply here and is dealing with the detail being presented to him by the banks that he requires as part of his regulatory responsibility. As I said to him, and repeated again recently, if the regulator needs further legal authority or provision of authority from Government, that will be available to him.

I like to think, and I said this to the banks, that they will be taking their programmes on to local radio stations all over the country to explain to people what new lending they have put in place in each county and how many mortgage problems they have sorted out on a monthly basis so the people are informed and do not hide from something that will come at them sooner or later and there is a facing up to the issue. Between the programmes provided by the Government, the plans that are in place and the requirements under the regulator's responsibility at Central Bank level, everyone must sit down together as quickly as possible to arrive at a solution irrespective of what that might mean.

The insolvency agency will become operational on 1 February next year and that means there is now an incentive for the banks to deal with these issues because people in mortgage arrears or distressed businesses will have the opportunity to take a different course through the insolvency agency when it is established. The legislation must still go through Report and Final Stages and there are quite a number of amendments. The position is not as good as I would like it to be, but, out of all of the confusion and lack of clarity, things are now beginning to take shape. When I meet people who have serious problems with their mortgages, it is wonderful to have that pressure relieved and taken off them, that they can keep their homes and solutions have been arrived at. As the Deputy is aware, in a small number of cases, clearly the situation is impossible as far as the financial circumstances of a particular person might be.

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