Ciarán Lynch (Cork South Central, Labour)
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Question 163: To ask the Minister for Finance if he will propose a moratorium on repossessions to enable persons who are in arrears to renegotiate their mortgages; if it is his intention that following recapitalisation banks should reschedule excessive mortgages; and if he will make a statement on the matter. [5884/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will be aware that in keeping with the Government's announcement (11 February 2009) on recapitalisation, that a commitment was given to the publication of a Code of Conduct on Mortgage Arrears as part of the arrangements. The Code was published by the Financial Regulator on 13th February and applies only to mortgage lending activities to consumers in respect of their principal residence in the State. It is mandatory for all regulated entities operating in the State. Under the Code of Conduct, a lender may not seek repossession until every reasonable effort has been made to agree an alternative repayment schedule with the borrower. The Code will ensure that mortgage lenders can only commence legal action for repossession at least six months from the time arrears first arise.

The two recapitalised banks, AIB and Bank of Ireland, have each committed that they will not commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing, where the customer continues to cooperate reasonably and honestly with the bank. The recapitalised banks have, in addition, assured the Government that in the normal course of events they will make every effort to avoid repossessions, as has been evidenced by the low level of repossessions by them to date.