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

I note the recommendations contained in the report of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform on mortgage arrears. I understand that the Governor of the Central Bank will write to the committee shortly regarding the recommendations contained in the report.

I have informed this House previously that the Government has developed a comprehensive cross-departmental strategy in this area in line with the main recommendations of the 2011 Keane report. The implementation of this strategy is overseen at Government level by a special sub-committee which is chaired by the Taoiseach and at official level by a mortgage arrears steering group which is chaired by the Department of Finance. A number of key measures have been advanced in this regard. The first is an intensification by the Central Bank of its engagement with mortgage lenders to require them, under the mortgage arrears resolution targets, MART, process, to propose and conclude sustainable and durable alternative arrangements with their customers in mortgage arrears. Targets have been set to the end of 2014 and by this date the relevant banks covered by the MART process will be required to have proposed sustainable solutions for 85% of mortgages which are more than 90 days in arrears and to have concluded solutions with 45% of such mortgages. Other measures include: significant reforms to personal insolvency and the establishment of the Insolvency Service of Ireland to provide more accessible and flexible statutory frameworks for people with unsustainable personal and mortgage debt; updating the code of conduct on mortgage arrears to provide additional safeguards for co-operating borrowers while also promoting and encouraging efforts by both lenders and borrowers to meaningfully address mortgage arrears or pre-arrears; the application of mortgage-to-rent schemes, which are now available as a social housing response to allow people to remain in their houses where possible; and the provision of an independent mortgage information and advice service.

The Central Bank's latest publication in this regard, Residential Mortgage Arrears and Repossessions Statistics, for the end of quarter 2, 2014, shows that the number of mortgage accounts for principal dwelling houses, PDHs, in arrears fell for the fourth consecutive quarter. At the end of June 2014, a total of 90,343 PDH mortgage accounts, or 11.8% in total, were more than 90 days in arrears. This represented a decline of 3% over the quarter. The data also shows that almost 102,000 PDH mortgage accounts were classified as restructured and, of these, 81.2 % were deemed to be meeting the terms of their current restructuring arrangement.

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Separately from Central Bank quarterly reports, a monthly reporting regime on mortgage restructures and arrears for the six main banks covered by the Central Bank's MART process has been put in place by my Department. The latest publication, with data for the end of July 2014, shows that the number of PDH mortgage accounts in arrears of greater than 90 days has fallen by over 7,100 when compared to the end of the first quarter, while the total number of PDH accounts in mortgage arrears has fallen by 8,845 in the same period.

Taken together, the overall strategy and framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebtedness situations. Nevertheless, relevant Departments and agencies will continue to keep the position under review and can make any further adaptions to the overall framework as considered appropriate. However, early and effective engagement between borrowers and lenders remains key to resolving most cases of mortgage difficulty. Where there is effective and meaningful engagement by all parties regarding a mortgage in difficulty, the data shows that an increasing number of durable, long-term mortgage restructures can be and are being put in place.

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