Noel Coonan (Tipperary North, Fine Gael)
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Question 36: To ask the Minister for Finance his plans to obtain the agreement of other financial institutions to the 12 month moratorium on repossessions agreed by the two major banks. [27892/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is a particular priority of the Government to ensure as much as possible that difficulties in relation to mortgage arrears do not result in legal proceedings for home repossession. Home repossession should be and generally is the last resort for the lender and the preferred method of dealing with arrears cases should be early intervention.

The Recapitalisation Programme announced on 11 February 2009 includes a new Code of Conduct for Mortgage Arrears, which has been issued by the Financial Regulator and came into force on the 27 February 2009. The new Code applies to mortgage lending activities to consumers in respect of their principal private residence in the State and is mandatory for all mortgage lenders registered with the Financial Regulator including so-called "sub-prime lenders". Under the mortgage arrears code where a borrower is in difficulty the lender shall make every reasonable effort to agree an alternative repayment schedule. Under the Code consideration should be given on a case-by-case basis to alternatives such as deferral of payments, extending the term of the mortgage, changing type of mortgage, or capitalising arrears and interest. Obviously cases will arise where the arrears situations persist despite newly agreed changes in repayment schedules. The Code provides that where the arrears situation persists, the lender may reserve the right to enforce the mortgage agreement. However, it must wait at least six months from the time arrears first arise before applying to the courts to commence enforcement of any legal action on repossession of a borrower's primary residence.

The Financial Regulator's Consumer Protection Code also sets out requirements that a regulated entity must contact the consumer as soon as it becomes aware that a mortgage account is in arrears and that it must have in place a procedure for handling accounts in arrears.

The Irish Banking Federation and the Money Advice and Budgeting Service recently agreed an Operational Protocol on consumer debt. The Operational Protocol will enable MABS and the IBF continue to work together effectively when dealing with debt problems of personal debtors who approach the MABS Service for assistance.

The number of residential properties taken into possession by Irish Banking Federation Members in 2008 was 96. This compares with the UK equivalent number of approximately 40,000.

I therefore have no plans to obtain the agreement of other financial institutions to the 12 month moratorium on repossessions agreed by the two major banks as I am satisfied that the managements currently in place are sufficient to safeguard the interests of borrowers who experience difficulty in meeting their mortgage repayments. I will of course be keeping the situation under close review.