Enda Kenny (Mayo, Fine Gael) | Oireachtas source

Following analysis of the scale of mortgage distress, the Government has put in place a programme of actions and options for people who find themselves in mortgage distress or mortgage arrears. The rights of borrowers and lenders have been rebalanced, with the biggest shake-up of insolvency law in over 100 years. We have given additional mortgage interest relief to those who bought their houses during the so-called boom years of the bubble. The tools are in place for a range of options to be considered for people who find themselves in mortgage distress, of which there are many. At the end of June, there were 770,610 private residential mortgage accounts, of which 97,874, or 12.7%, were in arrears for greater than 90 days. The level of early mortgage arrears, for less than 90 days, continues to drop - it stood at 3.3% at the end of the first quarter. This is a welcome and positive trend and there are some signs of progress emerging. Some 80,000 mortgages have been restructured, while almost 24,000 new restructures have taken place in the past quarter. The Central Bank has indicated that almost 76.5% of the stock that was restructured are deemed to be meeting the terms of the restructured arrangements, in other words, that they can be a sustainable solution that works for the lender and the borrower.

That represents an improved position on what certainly was there previously. In addition, the banks have now 4,500 split mortgages, either in operation or being offered to customers, and those split mortgages will be listed on the Central Bank's statistics when they have operated successfully through a trial period for six months.

In regard to the other matters, the Grant Thornton report makes observations on the position. The personal insolvency arrangement was never deemed to be the be all and end all for all of these matters. It was another option to be considered where a practitioner would sit down with the person in mortgage distress and work out all of the options available in terms of the person's circumstances. Clearly, prior to getting into the personal insolvency agency, which only opened its doors quite recently, there is the requirement for banks and consumers to engage to see can a deal be cut in respect of what the customer's particular circumstances might be. From a Government point of view, I recognise that this is a fairly horrendous situation for many but, as I stated, 80,000 mortgages have been restructured, 24,000 of which have been in the past quarter. The Central Bank is the regulator here. It has set the targets for the bank. It has got the first reports in. It must audit these and verify that they meet sustainability criteria, in other words, that it works for the borrower and for the lender, for the time ahead. While Grant Thornton has made its observations, one needs to have the circumstances in every case laid bare before one can identify what is the best solution in respect of all of those so they can have a sustainable position worked out on both sides.

See this speech in context