Brian Hayes (Dublin South West, Fine Gael)

That is a fair point. However, it is the Government's firm view that there is no reason the code should not be fully endorsed and operational by 30 June. If it is not, we will monitor it very closely.

We all have a responsibility to ensure that people can stay in their homes and to work through a viable solution to ensure that the family home remains intact. Senators will be aware that one of the key commitments in the programme for Government is to examine the introduction of a two year moratorium on repossessions of modest family homes, where a family makes an honest effort to pay their mortgage.

The motion refers to the large number of homeowners who are in negative equity. In any policy response it is important that a distinction be made between householders who are in a position to meet their mortgage repayments and those who at present are not. The ESRI, in a 2009 paper on negative equity in the Irish housing market, noted at the outset that many of those in negative equity would be unaffected and would continue to pay their mortgage without difficulty. The key issue is the absolute necessity to ensure that the 1.8 million people currently at work, who can continue to pay their mortgage, remain at work. That would be a priority for all sides of the House.

The supports available to assist people in arrears with their mortgage repayments in respect of their principal private residence can be grouped under four headings. The first is the mortgage Interest supplement scheme, second is the availability of advice through the Money Advice and Budgeting Service, third is the protection that is given to mortgage holders under the Central Bank's code of conduct on mortgage arrears and the fourth is the deferred interest scheme that lenders representing the majority of the market have promised to make available. The deferred mortgage interest scheme arose from the Cooney report. It is a sensible idea, that people should be asked to park their mortgage interest payments for a period of time if they can afford to do that. The fundamental question is whether that is happening, and I am not convinced it is. Is that option being made available by the banking sector to people who find themselves in arrears? It is certainly a proposal that has merit and can work. Whether it is being put in place by the banking system is a matter for active consideration by the Government.

The revised code that has been put in place includes more detailed requirements for lenders when dealing with borrowers' arrears and financial difficulties. The most significant changes in the revised code include: a provision that the code will now apply to borrowers who notify their lenders that they are facing financial difficulties and may be at risk of mortgage arrears; the lenders must establish a mortgage arrears resolution process, known as a "MARP" and use this framework when dealing with arrears and pre-arrears customers; lenders must ensure that communications with borrowers are presented in a clear and consumer-friendly manner - that will be a first - and must make available to borrowers an information booklet which provides details on the mortgage arrears resolution process; lenders cannot initiate more than three unsolicited communications with a borrower. I have heard about cases in my constituency involving almost manic calls from lenders, putting pressure on people. The code is clear that the lender cannot do that, and people must be made aware of their rights under the code, given that the banks have all signed up to the code.

Furthermore, under the code, a lender must not require a borrower to change from an existing tracker mortgage to another mortgage type, as part of an alternative arrangement offered to the borrower in arrears; lenders are required to set up an arrears support unit to assess arrears and pre-arrears cases; and borrowers can make an appeal regarding the decision of the arrears support unit. The code is in place and all the major banks have signed up to it and, from 30 June, it is a statutory code. We must inform people that they have rights and ensure they know that these are rights on which they can stand. That is important.

Finally, I turn to the issue raised by Senator Hayden and others, "mortgage to rent" schemes and "debt for equity" schemes. The mortgage arrears and personal debt group, or the expert Cooney group, considered the potential role of both schemes in an Irish context. The group noted that mortgage to rent schemes operating in the UK are based on very different funding models than those which would pertain in Ireland. It concluded that the current budgetary and fiscal environment and existing levels of social housing need meant that the introduction of an Exchequer funded mortgage to rent scheme would not be feasible. However, it also said that a mortgage to rent scheme could be worthy of further consideration were the general fiscal position and conditions in funding markets to improve significantly.

The group also considered the Government debt-for-equity schemes that operate in Scotland and England. It noted that these schemes were generally dependent on the owner having a loan not exceeding 75% of the value of the home. I wonder if that would apply in the negative equity cases we face. The group concluded that such schemes would have limited application in Ireland where a large number of mortgages are in negative equity. The Cooney report, which some colleagues have referred to in disappointing terms, was the first report on this matter.

The Government takes this issue very seriously. It is a matter of huge concern that so many people now find themselves in negative equity. We have a responsibility to work with Parliament and its committees to ensure that practical solutions ensue. All of these matters are under active consideration by the Government. The points that have been made by all sides in this debate are valid and will be considered in detail by the Department of Finance. When a new package of measures is produced and approved by the Government we will have been cognisant of the views of Members of this House in terms of trying to work out the solutions.

I thank the Senators for putting down this motion. It has generated two useful hours of debate. We are conscious of the problem that exists and the necessity to bring forward better solutions than those currently available.