Bernard Durkan (Kildare North, Fine Gael)
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I thank the Ceann Comhairle for allowing me to raise this issue again and I thank the Minister of State for coming to the House to respond.

I brought this to the attention of the House some days ago. It still goes on. I alert the House about the degree to which lending agencies, namely investment funds, otherwise known as vulture funds, and some of the standard banks, are hustling borrowers into hasty decisions and are frightening borrowers. There is a clear indication of a resolute approach by the lending institutions, regardless of the circumstances that might have prevailed.

In recent years in this House we listened to good advice, again and again, that if borrowers tried to pay as much as they could, they would always receive fair treatment. I know of several cases, as does everyone else in this House, where the borrowers made every effort to make the highest possible payment over eight, nine or ten years and did so without fail every month. That is all being ignored now. The lending institutions are making every effort to secure the house or property involved and to make sure there is a forced sale. The laughable thing about it is that they call it an agreed sale. A lot of pressure is being put on. It is not an agreed sale. It is a forced sale. The matter involves many families who are disadvantaged, perhaps by virtue of their health or perhaps there are children with special needs in the household. That does not in any way influence the lending institutions. They want to go forward and suppress borrowers to the extent that they are frightened into making whatever payments or walking away. In the current housing crisis, the chances of such families being housed in the near future are slim to none.

It is time again that the Central Bank, which has already spoken about this, is informed that the lending institutions are not observing the rules it laid down. It was a pillar of the understanding reached many years ago that the Central Bank would control those lenders that were not originally under the control of the Central Bank including the unauthorised third parties that came into the marketplace. I raise it again. I named some of them on the last occasion, such as Pepper Advantage Ireland and Start Mortgages. It still goes on. As long as it continues, the reign of terror will continue to have a huge impact on the people of this country who found themselves in an indebted position.

In most cases, these mortgages were sold on one, two, three and up to five times to other independent institutions, sometimes in a bundle, sometimes on their own. There is a variation between those deemed to be better and those deemed to be worse. One way or another, it falls to us now to remind them that the banking institutions were salvaged by the people of this country and they took the right decision to ensure the country survived. It is now time for the lending institutions that are circumventing the regulations to some extent to realise that what is good for the goose is good for the gander. They should think about where they came from and the support they got. I hope they will give the same chance to the borrowers.

Niall Collins (Limerick County, Fianna Fail)
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I thank the Deputy for raising this important matter.

The Government is acutely aware of the pressure that the rising interest rate environment may have on borrowers. In light of this, the Minister convened a meeting with lenders active in the mortgage market on 31 August. The Central Bank of Ireland, the Insolvency Service of Ireland, the Citizens Information Board and the Money Advice and Budgeting Service, MABS, also attended. Following this meeting, on 6 September, the Banking and Payments Federation of Ireland, BPFI, launched the second phase of its dealing with debt campaign to highlight new and existing supports available for mortgage customers.

One of the new initiatives to which I and the Minister draw the Deputy's attention is the work between credit servicing firms and MABS on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty. The consumer protection framework provides the same protections for borrowers regardless of the regulated entity with whom they are dealing, be that a bank, retail credit firm, RCF, or credit servicing firm, CSF. All these regulated entities must be authorised and supervised by the Central Bank and are subject to the full suite of relevant regulatory requirements and financial services legislation, including the code of conduct on mortgage arrears, CCMA. A broad range of measures are in place to protect mortgage holders who are experiencing difficulty with their repayments. The CCMA outlines how a lender must act if a borrower is in or facing mortgage arrears. The code sets out the process entities must follow when borrowers are experiencing difficulties with their mortgage payments. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits.

Regulated entities must explore all the options for alternative repayment arrangements to determine which arrangement, if any, is appropriate and sustainable for a distressed borrower’s individual circumstances. The range of sustainable solutions being offered to customers has expanded significantly, including the use of new alternative payment arrangements, mortgage-to-rent and personal insolvency arrangements. The CCMA provides for an appeals mechanism, including where the entity declines to offer an alternative payment arrangement, where the borrower is not willing to enter into the alternative payment arrangement offered or where the entity classifies the borrower as not co-operating. Appeals can ultimately be referred to the Financial Services and Pensions Ombudsman. The code of conduct on mortgage arrears must be complied with under the law and the Central Bank has the power to take enforcement action against any regulated entity that does not act in compliance with the code.

The Central Bank continues to supervise compliance with the code and will investigate any issues that arise, including patterns of behaviour that suggest the code process is not being followed. Under the code of conduct on mortgage arrears, the lender must contact the consumer about their mortgage arrears in a timely, clear and consumer-friendly manner; get information from the consumer about their financial situation; assess whether a suitable alternative repayment arrangement can be made; and resolve the case by offering an alternative repayment arrangement or not. The code of conduct on mortgage arrears has been designed to protect consumers and regulated lenders are legally obliged to comply with it. The code requires lenders to provide dedicated and specially trained staff in their arrears support unit to manage cases. This includes having any meetings with customers in private and referring them to their online or hard-copy information. Lenders must also follow the mortgage arrears resolution process that sets out how lenders must communicate with consumers and assess their situation with the aim of coming to a resolution. It includes having an appeals process in place in order that consumers can appeal certain decisions of their lender.

This is a robust framework that binds all regulated lenders. If the Deputy has evidence that firms are pursuing borrowers contrary to the provisions of the code of conduct on mortgage arrears, the Central Bank of Ireland will consider any such information as part of its supervisory duties.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister of State for his comprehensive reply. A typical example of some of the things that are happening at present is that the lender will encourage the submission of a proposal to make payments or bring about a resolution and, invariably, that will have to be referred to a credit committee, which will reject it on the basis it is not realistic or sustainable. The lending institution, therefore, makes the decision to exclude the customer from the possibility of attempting to resolve the difficulty that has arisen.

As I said, there are some circumstances surrounding individual cases that are very testing, such as serious health conditions, which need to be taken into account and should be taken into account. There are also serious circumstances in respect of death, whether the death of a partner or whatever the case may be, and there are cases where families have split up, with one partner having gone in one direction. It is not at all unusual for the lending institution to settle with one partner, to the exclusion of the other, and then to come back at the end of the day and say the other partner is responsible for the whole lot.

That is fine and it sounds great, and it strikes terror into the hearts of borrowers, but I want to say this. It is very seldom that the borrower has not engaged. In fact, these borrowers engaged to the extent they were exhausted, and they came to the conclusion that every proposal they made was going to rejected in any event. Now the attitude has become more aggressive and abrupt, and there is a clear indication that there is an intention on the part of customer service agents and subsequent lenders to enforce the law, that is, to repossess the property, sell it from under the feet of the borrower in the shortest possible term and get a hold of the assets at a time when the value of the assets is much higher than it was some years previously.

Niall Collins (Limerick County, Fianna Fail)
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I again thank the Deputy for raising the issue. In the first instance, I would encourage any person who is experiencing a repayment difficulty, or who has any other genuine concern in respect of their mortgage, to contact their mortgage creditor to discuss the matter. Of course, it is also essential that, in turn, these Central Bank-regulated entities, irrespective of whether they are a bank, a retail credit or a credit servicing firm, constructively engage with their borrowers to address any legitimate concern raised and act fairly in the interest of their customers. That is what lenders are required to do under the Central Bank consumer protection framework and it is the minimum standard with which Central Bank-regulated firms are expected to comply.

The Deputy will be interested to know that the Minister for Finance has tasked officials with reviewing the current mortgage arrears framework and an interdepartmental group has been established to review the mortgage arrears framework. The mortgage arrears group comprises representation from the Departments of Finance, Justice, Housing, Local Government and Heritage and Social Protection. The focus of the group will be to consider the impact of the mortgage arrears framework and the current resolution options among the agencies and bodies, and recommend refinements and improvements to better address the economic and social impact of mortgage arrears. The mortgage arrears group has commenced its work and will report on its review during the second quarter of 2024.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister of State.