Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Ceann Comhairle's office for allowing me to raise this issue. We are all aware of reports this week that levels of mortgage arrears in the private sector have reached 10.5%. Given that local authority house purchasing support is generally the lender of last resort, it is inevitable that it will suffer from a higher rate of arrears. The Department of the Environment, Community and Local Government needs to address this situation and provide guidelines to local authorities which are struggling to cope with the problem. The level of local authority house repossessions has greatly escalated in the past two years by comparison to previous years. Based on the latest figures available in County Offaly, for example, up to the last quarter of 2010, some 106 homes were in arrears under the various affordable housing schemes, including shared ownership and tenant purchase. The total value of those loans amounted to €1.7 million. Councils must be equipped to facilitate people who are struggling to repay these mortgages.

If local authorities repossess such houses they are still left with the problem of rehousing the individuals involved. There are up to 100,000 people on existing social housing waiting lists across the country. This will add further to the pressure placed on what are already very stretched resources. These individuals will also be placed on rent supplement, thus further pressurising the State coffers.

Possible solutions to alleviate the burden on local authority housing lists include interest-only repayments, deferred payments for a period or an extended loan repayment period. The Department is committed to issuing guidance to local authorities for dealing with houses in arrears before the summer recess but no movement has occurred so far - at least, no movement that we are aware of, or led to believe may be forthcoming. The updated guidance to local authorities is supposedly being drafted in consultation with the County and City Managers Association. We are led to believe that this will come before us prior to the summer recess. Can the Minister of State confirm that this is the case?

Will the Government develop a system that emphasises the rights of home owners? Can the Government honour its commitment to produce new guidelines? If so, when will that happen and what form will those guidelines take? Can people be afforded some solace that local authorities will have guidelines which will have the rights of home owners as their focus?

Seán Sherlock (Cork East, Labour)
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I thank the Deputy for raising this important matter. Local authorities have traditionally been the lenders of last resort for low income households who could not access funds from commercial lenders. By definition, this cohort of borrowers is more susceptible to the economic downturn and external shock. In this context, it is unsurprising then that local authority mortgage arrears should exceed those in the commercial sector and the Department's most recent information puts the level of loans in arrears at almost 28%.

In 2009, the Department issued guidelines for the granting of local authority housing loans which applied stringent conditions and a more homogenous process across all 34 administrations. Credit checking of applications by the Irish Credit Bureau was a central component of this initiative, and loans advanced under the new regime are performing considerably better than pre-2009 ones.

However, it is important that households facing difficulties are treated fairly and consistently across all local authority areas. In that regard, the Department issued comprehensive guidance in 2010 based on the regulator's code of practice. This is to ensure that cases of local authority mortgage arrears are handled in a manner that is sympathetic to the needs of the particular household while also protecting the position of the local authority concerned.

Recognising the increasing difficulty with local authority mortgage arrears, the Department has been working in conjunction with the City and County Managers Association to produce a loans management manual, the publication of which is imminent. This will provide borrowers in distress with a suite of options under a mortgage arrears resolution process, MARP, to deal with their loans. It closely mirrors the Financial Regulator's revised code of conduct on mortgage arrears, which came into effect on 1 January 2011. It provides for a collaborative engagement between borrower and lender to either restructure the loan to a sustainable level, or else recognise its sustainability and act accordingly.

Whereas it would be hoped that as many home owners as possible could be facilitated under the MARP, it would be unrealistic not to accept the inevitability of a proportion of loans being deemed unsustainable. In these circumstances the local authorities and the borrower would need to face the inevitability of the loan being unsustainable and act accordingly in a collaborative and co-operative manner.

Local authorities will continue to deal with distressed borrowers with the same forbearance and sympathy they have exhibited in the past. They will facilitate where at all possible as many home owners as possible to retain their properties and service their debts until such time as we return to less challenging times.

I do not have a date in respect of the question the Deputy asked but respectfully suggest that if he were to table a parliamentary question or send me on note on it, I would be happy to try to oblige him. We do not have a definitive timeline for the publication of the guidelines but I will endeavour to come back to the Deputy on that.

The Deputy referred to 106 homes in the case of County Offaly. I am not sure if that is the rate of arrears, to what exact figure that would amount, or what it would be as a percentage of the loan book in the Offaly area. If there are issues pertaining to his specific area, I have an open mind in terms of engagement or at least I can refer them to the Minister of State, Deputy Jan O'Sullivan.

Barry Cowen (Laois-Offaly, Fianna Fail)
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On the Minister of State's last point, I merely used that example as a reference to indicate the levels that exist countrywide. It is indicative of the position in a county similar to it, be it Tipperary or Laois, and of the position across the country for similar types of counties. I used that example merely to show that in a county such as that, there is €1.7 million of a loan value that is greatly distressed and requires the attention of the new publication that the Minister of State mentioned. If he cannot give me a timescale for it, can the Government not honour its commitment to bring this forward before the summer recess?

Has the Money Advice and Budgeting Service been consulted and formed part of the consultancy process to bring about this publication? The Deputies present were here last week when we discussed a Private Members' motion on the area of credit management and Deputies across the board complimented the work that MABS is doing. They are at the coalface in dealing with this issue and they must form the basis of any publication which sets out an agenda and a ways and means by which local authorities will deal with this issue in the future. What are the Department's plans for the shared ownership scheme in the future?

Seán Sherlock (Cork East, Labour)
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Having been a member of a local authority and as somebody who continues to interface with a local authority on behalf of my constituents, it is fair to reiterate that the level of sympathy and empathy with individual clients is one kind of a positive engagement where the local authority endeavours to do its very best for the client in question. I believe we would all agree on that point. However, there is an inevitability that a certain number of mortgages will go under.

On the specific issues the Deputy raised, it is not fair to assume that because there is a lack of a timescale for the publication the Deputy would infer that it will not be before the summer recess. I can come back to him on the specific matters raised and refer them to the Minister of State, Deputy Jan O'Sullivan.

I will undertake to also refer the Deputy's question on the shared ownership scheme to the Minister of State, Deputy Jan O'Sullivan. I am not trying to dodge the issues, I simply do not have the specific replies to the Deputy's questions and I would rather not try to play a game of bluff.