Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I have stated on many occasions that it is a key responsibility of financial institutions to do more to assist those in severe financial difficulty. The implementation of sustainable mortgage arrears strategies and solutions by individual banks for their distressed customers, with Central Bank oversight, is, therefore, a key element of the overall framework to address the mortgage arrears problem. The Deputy will be aware that the Central Bank’s mortgage arrears resolution targets, or MART initiative, which was announced last March set time-bound and measurable targets for the six main lenders, requiring them to systematically address their arrears books. The Central Bank initially required the main mortgage lenders to propose sustainable solutions to 20% of mortgages in arrears for over 90 days by the end of June. The initial results of the Central Bank's audit of the banks' end of June returns will be available shortly. They will provide an independent assessment of compliance by the banks with all MART requirements.

The target for proposed solutions rose to 30% by the end of September and will increase to 50% by the end of December and 70% by end of March 2014. Lenders have submitted their end of September returns to the Central Bank and indicated that they have met and, in some cases, exceeded the 30% end of September target. The Central Bank is now also requiring banks to conclude sustainable solutions with 15% of their customers by the end of this year and 25% by the end of March 2014.

As the Deputy is aware, the Central Bank publishes quarterly statistics for the levels of mortgage arrears. As of June 2013, some 79,357 PDH mortgages had been restructured, of which over 60,000 were deemed to be meeting the terms of their arrangements. The Central Bank has informed me that updated data for September 2013 are due for publication around the end of November.

Separately from Central Bank quarterly reports, my Department is publishing monthly data for primary home mortgage restructures put in place by the six main lenders covered by the Central Bank's MART process. This will place more timely information in the public domain on the progress made by the main banks to resolve mortgages in difficulty. This should greatly assist the objective of placing more information in the public domain on the progress being made by banks on mortgage restructures. The recently published data from my Department for the end of September show that the number of PDH mortgage accounts in arrears for greater than 90 days had fallen from 82,624 to 81,156, a drop of 1,468 accounts.

Additional information not given on the floor of the House.

I have previously informed the House that letters threatening repossession or legal action could not, in my opinion, be considered a sustainable solution under the mortgage arrears targets process and should only ever be considered after every possible avenue for a solution has been exhausted. The Governor of the Central Bank has stated any bank proceeding lightly to legal recourse with co-operating borrowers without satisfying the protections of the code of conduct on mortgage arrears, or where alternative sustainable arrangements are available, is not acting in a manner consistent with the MART regime.

Regarding the tracker issue, officials from the Irish authorities are in regular dialogue with all of the State supported banks in an effort to enhance stability and facilitate the sector's return to profitability. The long-term profitability of the State supported banks depends on many variables, of which the impact of tracker mortgages is only one. The Irish authorities have also engaged with the troika to discuss possible ways of funding Irish banks' tracker mortgages at an overall lower cost and in a sustainable manner. Discussions to date have mainly focused on examining the tracker books of the domestic banks and the implications that alternative funding costs will have for the loan books and the profitability of the banks in question. Discussions have been exploratory in nature and further analysis is being carried out.

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