Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I will begin by echoing the sentiments expressed by my colleague, the Minister of State, Deputy McHugh, when he delivered the Government's opening response to this debate. I join with Deputies on all sides in thanking Deputy Donnelly for tabling this Private Members' motion on mortgage arrears. I welcome the opportunity to contribute on what everyone agrees is an important issue, one that I assure the House is rightly receiving significant attention from the Government.

The tabling of this motion was timely. We have heard a range of views from all sides of the House that will be useful to the Government's considerations in the context of its imminent announcement on mortgage arrears. Turning to her request, I assure Deputy Maureen O'Sullivan that every idea raised during this debate will be considered. There is no monopoly on good ideas. We do not believe that the Government has all of the answers. Many ideas raised and suggestions made during this debate are under active consideration. An announcement from the Government is imminent, as the Minister outlined in his spring economic statement this afternoon.

From listening to the debate, it strikes me that the Government and members of the Opposition are looking to achieve similar outcomes in respect of mortgage arrears and retention of the family home. We could have a debate on how best to achieve those outcomes. Addressing personal indebtedness is essential as our economy returns to strength. In that sense, I do not accept Deputy Pringle's suggestion that it is ironic to hold this debate on the day of the spring statement. Getting to full employment, reducing taxation, putting more money in people's pockets and increasing domestic demand in the economy will help a normal banking and mortgage system to function.

Since taking office, the Government has put in place a broad strategy to address the problem of mortgage arrears, which the motion recognises. The strategy has included an extensive suite of interventions, for example, specific Central Bank targets for the banks through the mortgage arrears resolution targets, the code of conduct on mortgage arrears, extensive recasting of the personal insolvency legislation, which must be recognised by all sides, the provision of advice through Department of Social Protection-led initiatives and the mortgage-to-rent scheme, which is designed to assist borrowers in unsustainable mortgage positions to remain in their homes through the involvement of social housing agencies. However, some of the criticism of that scheme made this evening was legitimate in terms of the need to reconsider it.

The Central Bank's most recent publication, published in March 2015, covered data to the end of quarter 4 of 2014 and showed that the number of mortgage accounts for principal dwelling homes - family homes - in arrears continued to fall, marking six consecutive quarterly declines. The Central Bank also showed that there were 758,988 mortgage accounts outstanding in December and, of these, 648,622 or approximately 85% were not in arrears. This is an important statistic and sets a context for holding debates and considering the entire mortgage situation. While the number of accounts in arrears over 90 days remains high, they are down from a peak of 98,736 at the end of September 2013 and stood at 78,699 last December. While much remains to be done, this represents a 20% decrease in arrears in this category.

I will make a point about the benefits of indebted borrowers engaging with their lenders in the context of the Central Bank's data on mortgages that have been restructured. Almost 115,000 family home mortgage accounts have been permanently restructured. Some of these may not have been in arrears. This number is approximately one in seven. Over the course of 2014, there was an increase of more than 30,000 in the number of accounts that were restructured. A significant number of mortgage accounts have been restructured, although more need to be, and a large number of borrowers have consequently been able to remain in their homes. This shows that engagement between borrowers and lenders can make a crucial difference and can pay off. This is not a criticism of borrowers. Often, people are in stressful situations. It is important that the engagement be meaningful. The Government will ensure that this issue is addressed in the new package of measures to be announced imminently.

It is also worth emphasising that, even if the mortgage arrears resolution process has concluded and legal proceedings have commenced, the code of conduct on mortgage arrears requires that a lender must continue to maintain contact with the borrower and-or his or her nominated representative to see if an alternative repayment arrangement can be agreed even at that late stage. The code of conduct is an important consumer protection mechanism and compliance with it is monitored by the Central Bank.

It is worth repeating that the strong view of the Government is that, in respect of co-operating borrowers under the mortgage arrears resolution process, repossession of a person's primary home should only be considered as an absolute last resort. Every effort should be made to agree an acceptable arrangement as an alternative to repossession. This is the approach that we are taking in the measures that we will shortly introduce.

See this speech in context