Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank Deputy Ó Fearghaíl for raising this matter in such a constructive way. He recognises, as does the Government, the State's responsibility to the people who have been affected this way as a result of the vaccination to which he referred. He must also recognise that the response must be multi-departmental, because it involves young people and adolescents who must interact with a number of different services, including health and education services. As a consequence, the issue must be approached in a multi-departmental manner.

On behalf of the Minister for Health and Children, I can assure the Deputy that the Minister is preparing a memorandum for the Government on this issue. I understand the memorandum will set out all of the issues in terms of additional supports required for those affected by narcolepsy. I also understand the memorandum requires the consent of the Minister for Public Expenditure and Reform and that the Department of Health and Children is in contact with the relevant officials in the Department. As Minister of State at the Department of Public Expenditure and Reform, I assure the Deputy that I will raise this matter not only with the Minister for Health and Children but also with the Minister for Public Expenditure and Reform, Deputy Howlin. It seems that in order for a memorandum to come to the Government setting out additional supports for these people, it requires the approval of both of these Ministers, as these supports will require additional funding. I will raise the issue with both Ministers.

I propose to take Questions Nos. 73 to 83, inclusive, together.

The Central Bank has informed me that it does not track the number of borrowers falling within the MARP process but does track the number of alternative arrangements, and the nature of the arrangement, put in place across the regulated industry and which is published quarterly by the Central Bank. The Central Bank Code of Conduct on Mortgage Arrears, the current version of which came into effect from 1 January 2011, was issued under the provisions of section 117 of the Central Bank Act 1989. The Code applies to the mortgage lending activities of all entities regulated by the Central Bank, except for credit unions, in respect of loans which are secured by the borrower’s primary residence. The Code sets out the framework within which a regulated mortgage lender must engage with a borrower who is in arrears, or pre-arrears, in respect of a loan secured on the borrower’s primary residence and who is co-operating with the lender.

This revised Code sets out new and more detailed requirements that a lender must comply with when dealing with mortgage holders experiencing genuine arrears and financial difficulties. In particular, it provides that each lender must establish a Mortgage Arrears Resolution Process (MARP) and use this framework when dealing with its mortgage holders experiencing difficulty. This framework provides for a number of steps such as:

- communication with borrowers;

- the use of a standard financial statement to obtain financial information;

- assessment of the customer’s circumstances by dedicated arrears support units;

- resolution, which require the lender to explore all options for an alternative repayment arrangement in order to determine the most viable option in each case, and

- an appeals process, which initially will be an internal Appeals Board within the institution, to reconsider the matter if the borrower is not satisfied with the proposed resolution response. There is then the further option if necessary, to appeal to the Financial Services Ombudsman after the internal appeal process has ended.

MARP, therefore, is not a scheme as such but rather is a process put in place to govern the interaction between mortgage borrower and lender in circumstances where the former is experiencing genuine difficulty and allows both parties to assess the current situation with a view to coming to an optimal solution. In particular, a lender is required to explore all options for an alternative repayment arrangement to determine which options are viable for each particular case.

Other protections offered to borrowers under the CCMA include the following:

- all cases must be handled sympathetically and positively by the lender;

- a lender must not apply to the courts to commence legal action for repossession until every reasonable effort has been made to agree an alternative repayment arrangement with the borrower;

- where a borrower co-operates with the lender, the lender must wait at least 12 months from the date the borrower is classified as a MARP case before applying to the courts to commence legal action;

- each branch or office of the lender must have one person responsible for dealing with borrowers in difficulty and must also have a dedicated Arrears Support Unit to deal with all MARP cases;

- lenders are restricted from imposing charges on arrears arising on a mortgage account in arrears where the borrower is co-operating with the lender;

- all communications about arrears and pre-arrears must be provided in a timely, clear and consumer friendly manner, e.g. information booklet providing details of MARP and dedicated section on website.

Quarter 2 2012 Mortgage Arrears Stats published in August shows the number of mortgages secured on Private Dwelling Homes (PDH’s) which are in arrears. This is also broken down into restructured number and type. . The publication of Quarter 3 data is expected in mid-December, will also include information on Buy to Let properties for the first time.

Regarding complaints to the Financial Services Ombudsman, I am informed by that Office that it introduced a policy last April in response to a number of complaints being submitted to his Office regarding mortgage arrears/pre arrears, to deal with such cases. This policy states that a complainant must first engage with the financial institution in question and fully exhaust the MARP process. The Financial Services Ombudsman will not investigate such complaints where the MARP process has not been exhausted. This gives both parties the opportunity to re-engage with the process and find, where possible, an alternative resolution. If a complainant uses the MARP process, with either party failing to come to a resolution, the complainant can revert back to the Financial Services Ombudsman. In that regard, the above procedure has proved relatively successful as it ensures that the respective parties engage with one another, before referral to the Ombudsman’s Office. However, there have been cases where MARP has been exhausted, and the Ombudsman followed up by investigating such complaints. Thus far, there have been 6 not upheld, with 5 partly upheld. There have been no cases where the Ombudsman fully upheld such a complaint.

The Central Bank also informed me that a review of lenders compliance with the CCMA was carried out by it in 2011, focussing on charges imposed by lenders. Please see a link to the Press Release on the outcome of this review below.

Also attached, for information, is a link to the CCMA and the Central Bank’s Consumer Guide to dealing with your lender below.

The Central Bank has informed me that it will commence a review of the Code of Conduct on Mortgage Arrears in the first quarter of 2013. The Central Bank would normally conduct a review following a reasonable time after implementation and the Code will require updating due to the introduction of the Personal Insolvency Arrangement insolvency framework as provided for in the Personal Insolvency Bill which is currently before the Oireachtas as well as longer term mortgage resolution options. The review will take into consideration recent developments that may be relevant to the issue of mortgage arrears.

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