Joe McHugh (Donegal North East, Fine Gael)
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To ask the Minister for Finance the numbers of mortgages that were drawn down in County Donegal and in Northern Ireland which are in arrears today; if he will explain his strategy for supporting affected families' wishes to move into sustainable financial arrangements and to also remain in the family home; and if he will make a statement on the matter. [13937/13]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank has advised me that it does not publish a geographical breakdown of its quarterly mortgage arrears statistics, nor does it publish data on the level of mortgage arrears outside of the State. The Government is very aware of the significant difficulties some home owners are facing in meeting their mortgage obligations and it has put in place a comprehensive strategy to address the arrears problem with the objective of, where possible, to allow people remain in their home.

A key element in this is real and effective engagement by lenders with their mortgage customers in arrears. As the Deputy will be aware, last week the Central Bank announced new measures to require the main banks to offer and conclude sustainable solutions tailored to individual cases. The range of solutions that can be deployed include the standard forbearance arrangements that are already used but can also extend to the more in depth restructuring arrangements as suggested in the Keane report. The Central Bank has set out specific performance targets for the number of durable solutions to be proposed by banks and will over time set targets for the conclusion and durability of such arrangements. This is a very important and necessary development in the ongoing engagement the Central Bank has with banks on their mortgage arrears resolution strategies.

It has to be accepted, however, that it will not be possible in all cases for people with the most distressed mortgages to retain an ownership interest in their home. This will not necessarily mean they will have to leave the home. The mortgage to rent scheme is available to assist families who would be eligible for social housing, and whose house is suitable for that purpose, to remain in their home. However, to be eligible for this the borrower would have to be in close contact with the lender under the mortgage arrears resolution process and his or her mortgage would have to be deemed to have been unsustainable in that process.

Personal insolvency reform was also identified by the Keane report as a key measure in addressing the mortgage arrears problem. The new Personal Insolvency Act has been put in place. In the context of the personal insolvency arrangement framework, which is the specific framework put in place by that Act to deal with unsustainable secured debt, there are certain criteria and factors that will have to be taken into account when the principal private residence is being considered. A very important factor is the onus that will be on the personal insolvency practitioner to, in so far as is reasonably practicable, formulate a proposal that will not require a person to dispose of an interest in or cease to occupy their primary home.

Also, as the Deputy will be aware, an extensive information and advice service has been put in place to assist mortgage holders, in particular when the person is considering a long-term forbearance offer from their lender.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Minister for his response. Mortgage arrears is the biggest issue in my constituency of Kildare South and the most common problem raised at my clinics. The Minister is well aware of the great distress mortgage arrears have on individuals and families as they try to cope with changing financial circumstances. The Government has stated the banks must propose sustainable mortgage solutions for distressed borrowers. This week, I have been contacted by two constituents who received letters from their respective banks blankly stating that the options open to them were voluntary sale or voluntary surrender. We must force the banks to be more creative instead of availing of the easy option from their perspective. Will the Central Bank do more to ensure the banks propose creative solutions? The mortgage to rent scheme has the potential to be a highly effective tool. What steps will be taken to roll out the scheme more widely in order that people are able to resolve their financial difficulties and remain in their homes?

Michael Noonan (Limerick City, Fine Gael)
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There is no doubt that private debt is a very serious issue. It is one of the key economic and social issues in the country and a matter which we are addressing in great detail. In terms of the options available to the banks, the Keane report laid out in detail a range of options. These options serve as a menu for face to face interventions by the banks and insolvency services to apply to particular cases. I am surprised to learn that the Deputy recently encountered two cases where the letters he described were issued. I presume they were issued at the end of a process. If they were issued at the commencement of a process, the Deputy should write to the Financial Regulator, Mr. Matthew Elderfield.

Martin Heydon (Kildare South, Fine Gael)
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I welcome the roll-out of the personal insolvency service, which is badly needed. I deal with constituents who have mortgages which they have no hope of ever repaying. The Central Bank must monitor closely how the banks engage with people in such circumstances to find a resolution that allows them to return to normal life and contribute to the local economy.

Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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Those of us who heard the Governor of the Central Bank, Professor Patrick Honohan, state he was tearing out his hair began to tear out our own hair as we pondered what might come next. While the Minister's plan sets targets for restructuring mortgage debt, it does not define what is a fair restructuring process. The question refers to County Donegal and Deputy Heydon referred to cases in his constituency. Every Deputy could relate similar stories about people in mortgage arrears. Will the Minister establish an independent body with the ability to compel banks to act? As Sinn Féin's spokesperson on justice, I worked through the Personal Insolvency Act, which gives the banks a veto over the personal insolvency process. If we leave it to the banks to sort out the problem of mortgage arrears, they will hit the Minister's targets but the question is whether they will they do so in a fair manner or whether Deputies will continue to take telephone calls from constituents such as those who contacted Deputy Heydon. Will the Minister establish an independent body?

Michael McGrath (Cork South Central, Fianna Fail)
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The targets that have been set are targets for the number of solutions proposed by the banks by June, September and December, respectively. It is critical that the Central Bank sets binding targets for the conclusion of agreements with borrowers. We must move into that space because the banks will be allowed to propose sustainable solutions involving interest only repayments or having someone declared insolvent. Both these options are listed as sustainable solutions. We need targets for concluding agreements.

Much of what we have seen so far is temporary forbearance. Those of us who are trying to help people secure longer term forbearance, for example, split mortgage or mortgage to rent facilities, have found time and again that the banks are telling individual borrowers they do not qualify for a split mortgage. I had a case recently where a couple with a number of children living in a four bedroom house were told four bedroom houses do not qualify for mortgage to rent facilities. Who is making the rules? People are not being given proper reasons for being deemed ineligible for a split mortgage. Has the Central Bank issued detailed guidance to the banks on this matter or are the banks making up their own rules on how split mortgages should work? Some banks are charging full interest, while others do not charge any interest on split mortgages. There is also no consistency in the qualifying criteria for mortgage to rent facilities.

Liam Twomey (Wexford, Fine Gael)
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The issue I raise may be a constitutional matter. Is it possible under the Personal Insolvency Act to protect family income, while at the same time relieving mortgage holders of their debt burden and allowing them to get on with their lives, even if this may not involve protecting the family home?

Michael Noonan (Limerick City, Fine Gael)
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To respond to Deputy Mac Lochlainn, the Personal Insolvency Act does not provide for a veto. This claim has been repeated time and again. The legislation provides for arrangements where creditors vote.

If, however, it drifts into bankruptcy, where it will go if there is no arrangement, solutions are imposed.

Deputy McGrath and his party have been looking for independence in the application of solutions. The Central Bank is independent and the new insolvency agency is independent also. It is not the Department of Finance that will be making the arrangements. They will be monitored by the Central Bank and, when things go down the legal route through the insolvency legislation, the insolvency service of Ireland under its director will sign off on the arrangements to be made.

Deputy McGrath asked about targets. The targets highlighted were percentages of offers of solutions. On the same day, Mr. Elderfield also said that, in parallel with the targets for solutions offered, he would set targets for concluding arrangements. He is on the record as having said that.

Deputy Twomey spoke about sustainability of income and keeping the family home. Every case will be dealt with separately. While cases can be put in different groups and there are several categories of cases, the director of insolvency is now drawing up guidelines as to what would be a satisfactory family income, after the arrangement. It is now built into the insolvency arrangements that they will be sufficient for a family to live on after whatever arrangement is put in place to suit their needs. In some cases people might rather hand back the keys. I have heard that said. In some cases getting out of a bad situation might be the way forward, but I am not advocating that.