Enda Kenny (Mayo, Fine Gael) | Oireachtas source

In addition, the Minister of State with responsibility for housing, Deputy Jan O'Sullivan, announced a new €20 million fund to allow local authorities to offer the mortgage to rent scheme to local authority mortgage holders with unsustainable mortgages.

Deputy McDonald also mentioned arrears. The total number of mortgage accounts in arrears has fallen by 5,833 between August and December of last year. The number of mortgage accounts in arrears of greater than 90 days has fallen from 82,624 to 79,782, a drop of 2,842 compared to the end of August. The number of total temporary restructures continues to fall and this indicates a move towards greater utilisation of permanent solutions. The total number of permanent restructures has risen by 9,952 up to December. There has been a significant rise in the split mortgages arrangements, from 2,500 to 6,239. The Central Bank mortgage arrears statistics reinforces the picture of a gradual improvement, although not as quick as one would like. Figures for quarter 3 to end of September in 2013 show that the number of mortgage accounts for principal dwelling houses in arrears fell from 142,892, or 18.5% of the total stock, to 141,520. That is the first decrease since the Central Bank series began in September 2009.

Deputy McDonald mentioned mortgages being sold to portfolio buyers and suggested they would not be regulated by the code of conduct on mortgage arrears, CCMA, of the Central Bank. The Deputy is aware that the sale process for the IBRC residential mortgages is currently under way. The final bidding date is 14 March 2014 and the continued application of the Central Bank code of conduct on mortgage arrears in respect of the IBRC residential mortgage portfolio depends upon the regulatory status of who acquires the portfolio at the end. In 2012, GE Money sold its residential portfolio of approximately 3,500 mortgages to the Australian company Pepper Finance Corporation (Ireland). As the group acquired the entire servicing platform from GE Money, the acquired entity remains regulated and CCMA continues to apply to the transaction. In December 2013, Lloyds Banking Group sold its Irish residential portfolio of 2,000 mortgages to Apollo Global Management. Apollo Global Management met the Central Bank and the Department and indicated clearly that it intended to voluntarily adopt the CCMA to manage the acquired loans. Apollo Global Management believes following CCMA is in the best interests of both and forms part of its core strategy. The Minister for Finance is aware of the concerns of borrowers about the sale of mortgage books to funds not covered by the CCMA. The Minister has instructed his Department to examine the issue in consultation with the Central Bank with a view to bringing forward a solution. Given that it is a complex legal issue, it requires careful consideration so as not to put at risk the application of the code of conduct. We will not know the regulatory status of the ultimate acquirer of the portfolio until the sale process is concluded. The outcome will determine whether we need to do anything. The Fianna Fáil Party proposes to make adherence to the CCMA a condition of the sales process but the insertion of such a condition is legally questionable as it leads to the erosion of the value of the assets from which all creditors must seek proceeds. The insertion of conditions that may erode the value would leave the special liquidators and the State open to challenge and possible compensation.

Under current laws, compliance with the CCMA is a necessary condition for lenders seeking to obtain court orders for repossessions of primary residences. The court will otherwise not allow it. I do not have figures to hand but the vast majority of repossessions have been voluntary. A number have gone down the court route but the vast majority have been voluntary. I can supply the Deputy with up-to-date figures.

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