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

The code of conduct on mortgage arrears, CCMA, is a statutory code issued under section 117 of the Central Bank Act 1989. The CCMA applies to all regulated mortgage lenders operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence, including any mortgage lending activities outsourced by these lenders. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent way by their lender and that long-term resolution is sought by lenders with each of their borrowers. Lenders are required to comply with all aspects of the CCMA and non-compliance with the CCMA is enforceable against regulated entities by the Central Bank.

The CCMA sets out a process called the mortgage arrears resolution process, MARP. The MARP is a four-step process that lenders must follow. The steps are as follows: communicate with the borrower; gather financial information; assess the borrower's circumstances; and propose a resolution. Bank and non-bank lenders offer a range of options for borrowers, including term extension, arrears capitalisation, split mortgage, mortgage-to-rent, etc. The CCMA states that in each case, a lender must explore all of the options for alternative repayment. A lender must document its considerations for each option examined, including the reasons that the option or options offered to the borrower is or are appropriate and sustainable for the borrower.

A lender must also document why some options are not appropriate for the borrower.

The numbers in mortgage arrears have been steadily declining. Data released by the Central Bank on 10 June shows that, to the end of the first quarter 2016, the number of mortgage accounts in arrears for principal dwelling houses has declined for the last 11 quarters. Some 120,447 principal dwelling house accounts were also classified as restructured. It is clear that where a borrower actively engages with their lender under the CCMA with a view to agreeing a sustainable arrangement to address their mortgage arrears, it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home. It is important to note also that the commencement of the court process is not a signal that a repossession will occur. It may often be the case that the process then prompts borrowers to re-engage with their bank and to find a solution. Often these cases are adjourned. I raised the issues in the Deputy's question with the Governor of the Central Bank in a recent meeting with him.

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