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

As I have indicated, the Government is aware of the significant difficulties some home owners are facing in meeting their mortgage obligations. A comprehensive strategy to tackle the problem is in place and its implementation throughout Government and by lenders is the priority. In that context, the Central Bank mortgage arrears resolution targets, MART, framework is key. Under this rolling process, quarterly performance targets are set to the end of June 2014 to require the banks to propose and put in place durable long-term solutions to address individual cases of mortgage arrears.

The Central Bank has indicated that all six mortgage lenders covered by the MART process have reported that they met the 20% proposed sustainable solutions target for the second quarter of 2013 and the 30% target for the third quarter in 2013. In particular, with respect to the 2013 third quarter target, which is the latest available data, the lenders have reported to the Central Bank that they have issued proposals to 43% of mortgage accounts in arrears as against the 30% target.

The new monthly mortgage restructures and arrears data published by my Department will also provide an impetus for the MART banks to increase the pace of provision of mortgage restructures. That data show that some progress has been made in putting permanent mortgage restructures in place. For example, the number of permanent restructures of permanent dwelling mortgages more than 90 days in arrears has risen from approximately 41,200 in August to approximately 49,300 in November 2013, an increase of almost 20%. The number of permanent restructures of mortgages more than 90 days in arrears has also increased.

The ongoing roll-out of the MART process, in particular the incremental targets to put in place sustainable mortgage restructures, will be important for this end. Of course, the MART process can only work to the benefit of borrowers in circumstances where the borrower works with the lender and engages with the process. Likewise, lenders should communicate and engage with a borrower in difficulty in line with the requirements of the code of conduct on mortgage arrears. Early and effective engagement with borrowers and lenders is, therefore, key to resolving cases of mortgage difficulty. Where there is effective and meaningful engagement regarding a mortgage difficulty, the data show that an increasing number of durable long-term mortgage restructures is emerging.

It will be necessary to build on this in 2014. The issue of mortgage arrears is a major problem that needs to be resolved not only for individual borrowers and lenders but also for the long-term economic and social health of the country. A comprehensive strategy to do this is in place and the Government will ensure it is fully implemented by all the parties involved in the process.

Deputy McGrath raised another question in his introductory remarks. From a statistical point of view the data must be recorded or noted somewhere. The Central Bank is bringing out a report on these issues. The Department of Finance is bringing out a separate report. They are somewhat different in their approach. A high percentage of the repossessions are voluntary surrenders and it is legitimate to take note of these. Obviously, if someone goes to Australia and surrenders his house on the way, it is a permanent solution. It may not be the most satisfactory solution but it is a permanent one. I do not want the banks to include these in some kind of hidden fashion in a general set of statistics. I want the banks to show the data separately. Then we can decide whether they are validly included. It needs to be transparent in order that we know what we are dealing with. To purport to substitute repossessions for restructuring offers was never the intention. The work of Deputy McGrath and the committee illustrated that much clearly and I believe the banks have learned their lesson.

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