Pearse Doherty (Donegal South West, Sinn Fein)
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2. To ask the Minister for Finance the legislative steps he will take to tackle the ongoing mortgage crisis and the mounting number of repossessions; and his views on the establishment of a body, independent of banks, with power to enforce resolutions in cases of arrears on a mortgage on a family home. [13306/15]

Pearse Doherty (Donegal South West, Sinn Fein)
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This question relates to the legislative or other steps the Government proposes to take in order to tackle the ongoing mortgage crisis faced by the State. We are all aware of the increasing number of families appearing before courts throughout the country in the context of repossessions. Is the Government developing a view on this matter and does it intend to put forward proposals to empower the courts to consider circumstances in which banks are vetoing solutions? Is it considering establishing an independent body? How does the Government propose to deal with this crisis, which is engulfing many families throughout the State and resulting in people losing their homes?

Michael Noonan (Limerick City, Fine Gael)
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I thank Deputy Pearse Doherty for tabling this question. Tackling mortgage arrears is a priority for the Government. A whole-of-government approach has been adopted in addressing this issue, with a view to maximising the level of loan restructuring arrangements and minimising the number of home repossessions. Initiatives such as the reform of personal insolvency legislation, the establishment of the Insolvency Service of Ireland, the introduction of a mortgage arrears information and advice helpline and the availability of mortgage-to-rent schemes ensure that borrowers are assisted in dealing with their arrears.

In March 2013 the mortgage arrears resolution targets, MART, framework was introduced. This sets out demanding quantitative targets for mortgage arrears resolution at six Irish mortgage lenders which account for 90% of the mortgages in Ireland. The six lenders - AIB, Bank of Ireland, Permanent TSB, Ulster Bank, ACC Bank and KBC Bank - are required to meet targets at quarterly intervals. In addition, the code of conduct on mortgage arrears, CCMA, sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residences. The CCMA provides a strong consumer protection framework to ensure that borrowers are treated in a fair and transparent manner by their lenders and that long-term resolutions are sought by lenders with each of their borrowers. Under the CCMA, a lender may only commence legal proceedings for repossession after it has made every reasonable effort to agree an alternative repayment arrangement with the borrower or his or her nominated representative, and where specific timeframes have been adhered to, or where the borrower has been classified as not co-operating. It is clear that the Government has put in place a number of initiatives to assist homeowners in difficulty, including reform of personal insolvency legislation, the provision of independent advice to those dealing with debt issues and, as already stated, the introduction of MART targets and the revision of the CCMA.

The most recent ISI results show an increasing take-up of its services, albeit from a low base. For quarter 4 of 2014, the ISI reported that it was dealing with debt of €1.5 billion and that the number of personal insolvency arrangements approved in quarter 4 had increased by 148% over that for quarter 3. The ISI also report that 75% of proposals are supported by creditors. The decision in 2014 to waive fees for the insolvency service, coupled with a targeted awareness-raising campaign, is likely to lead to greater engagement with the office.

Additional information not given on the floor of the House

My Department and the Central Bank monitor the situation in regard to mortgage arrears on an ongoing basis. Data published by the Central Bank in early March for the end of 2014 showed continued improvement in the number of personal dwelling house, PDH, accounts in arrears of greater than 90 days, which decreased by 7.4% over the quarter, representing the fifth consecutive reduction in the number of accounts in arrears for this category. In addition, the number of borrowers reaching agreements with their banks to restructure their mortgages is increasing, with almost 115,000 mortgages classified as restructured at end December 2014. It is also encouraging to note that approximately 85% of these restructured accounts are deemed to be meeting the terms of their current restructure arrangement.

This is, however, an area which remains under continuous review. More and concerted action is required by the banks to assist customers in arrears and, as the Taoiseach has previously announced, my Department is considering a range of options to support the existing framework and to improve the take-up of personal insolvency solutions.

Pearse Doherty (Donegal South West, Sinn Fein)
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I thank the Minister for his reply. Unfortunately, it merely constitutes a list of the initiatives the Government has taken in the past, some of which have led to a weakening of the position of consumers. The point I was trying to get at is that there has been speculation in the media that the penny is finally dropping in Government Buildings to the effect that something must be done to tackle the large number of repossession cases coming before courts throughout the land and that further action must be taken regarding the 100,000 families in mortgage arrears. We are well aware that this crisis was not created by the Minister or the Government and that it first emerged on the watch of the previous Fianna Fáil Administration. However, the crisis has become twice as bad under the stewardship of the Minister and the Government. Is anything else being proposed to deal with this matter and is the Government considering bringing forward further legislation in respect of it? Is it considering other measures which might assist in dealing with the crisis or is it satisfied that initiatives introduced heretofore are sufficient?

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the essential issue revolves around ensuring that there are sufficient procedures and initiatives available to allow mortgages to be restructured in a way that will see to it that they are affordable. Some 110,000 mortgages have already been restructured and significant progress has also been made across a range of initiatives. In the past month or so, the initiatives that are available to the banks have been reviewed in order to establish whether additional or modified initiatives that would work better might be put in place. Work in this regard is ongoing and an announcement on the matter will be made some time during the course of this month.

Pearse Doherty (Donegal South West, Sinn Fein)
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I welcome the fact that a review is taking place. I am not familiar with this review and I presume that the views of those on this side of the House are not being solicited in respect of it. We, as Opposition spokespersons on finance, and the Joint Committee on Finance, Public Expenditure and Reform, have invested a great deal of time considering the position with regard to the mortgage arrears crisis. When commenting on the review, the Minister referred to the suite of options that will be available in terms of restructuring. Does the review encompass a consideration of the powers that could be extended to the courts to deal with banks that are vetoing personal insolvency arrangements? Will the review be examining the position with regard to the bankruptcy rules and reducing the three-year term of bankruptcy to one year? The House is due to take Report Stage of the Personal Insolvency (Amendment) Bill 2014. Is the Government considering using this legislation to bring forward amendments to deal with the length of the term of bankruptcy or to stipulate what the courts may take into account when issuing repossession orders?

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, a menu of options is available to the lending institutions and mortgage holders in the context of restructuring mortgages. Some of these initiatives suit particular mortgages holders while others do not. One of the quite frankly disappointing aspects of this matter is the low level of take-up in respect of the personal insolvency legislation. However, the position in this regard is improving and I understand that the take-up figures are now comparable with those which obtained in the UK when insolvency legislation was introduced there. The insolvency regime and how it applies, and the other issues raised by the Deputy, are all contemplated by the review being conducted primarily by the Department of Finance. The views put forward by Deputies in this House and at the Joint Committee on Finance, Public Expenditure and Reform will, of course, be taken into account. The views of the Deputy and others are not secret and we are quite well aware of them.

I must sound a note of caution. It is possible that we could take initiatives which might make matters worse. As a result, we want to ensure that those we do take will be positive in nature and that they will contribute towards an overall solution. It is not the case that the options currently available have failed, but there is no doubt that they can be enhanced. As already stated, 110,000 mortgages have been restructured, and this represents significant progress. However, there is a residue in respect of which an enhanced range of options might provide assistance. As stated, I expect announcements on this matter to be forthcoming during the coming month.

Michael Kitt (Galway East, Fianna Fail)
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Question No. 3 is in the name of Deputy Donnelly. As the Deputy is not present, we will move to Question No. 4 in the name of Deputy Michael McGrath.