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

The Government is aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations, and the Deputy will know that a comprehensive strategy to tackle the problem is now in place.

 A key component of this is the Central Bank mortgage arrears resolution targets - or MART - framework, which set out quarterly performance targets for mortgage arrears resolution by the six main mortgage lenders. These lenders - AIB, Bank of Ireland, Permanent TSB, Ulster Bank, ACC Bank and KBC Bank Ireland - are required to meet targets for both proposed and concluded sustainable solutions in relation to their principal dwelling and buy-to-let mortgagees which are in arrears of more than 90 days. In that context, a sustainable solution has been defined in the Central Bank's published MART document as one of the following: an arrangement, concluded in accordance with the CCMA, in which the borrower is co-operating under the MARP process and the bank has satisfied itself that the arrangement provides a sustainable solution which is likely to enable the customer to meet the original or, as appropriate, the amended terms of the mortgage over the full remaining life of the mortgage; a personal insolvency arrangement effected under the Personal Insolvency Act 2012; or, if an arrangement could not be reached or is not appropriate having regard to the circumstances of the case, voluntary sale of the property securing the mortgage loan or, failing that, any situation in which the bank takes possession of the property, including by way of voluntary agreement with the borrower, or by court order or otherwise.

A range of sustainable solutions have been utilised by each of the lenders to date. These include but are not limited to term extensions, split mortgages, permanent interest rate reductions and voluntary solutions.

In regard to performance to date, lenders have reported to the Central Bank that they met the 20% proposed sustainable solutions target in the second quarter of 2013 and the 30% third quarter target.  In respect of the third quarter, lenders reported that they had issued proposals to 43% of mortgage accounts in arrears for more than 90 days. Furthermore, last December the Central Bank stated its expectations for the quarter ending June 2014 were that sustainable solutions offered to customers would reach 75% for accounts in arrears for over 90 days and that concluded solutions would reach 35%.

According to the latest information published by my Department, in the case of private dwelling homes, some 54,000 mortgage accounts in difficulty have been the subject of permanent restructuring following engagement between borrower and lender.  This is to be welcomed.  In our ongoing regular contacts with the banks my officials and I have clearly indicated that all possible restructuring options should be fully considered for co-operating borrowers who are in difficulty and that legal action to address a mortgage arrears case should only be used as a very last resort. It is accepted that 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 benefit of the country.  The roll-out of the MART process is providing momentum to resolve mortgage arrears cases and the outcome of that process, as well as the wider strategy framework, will be kept under close review by the Central Bank and the Government.

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