Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 104: To ask the Minister for Finance if his attention has been drawn to the severity of the problem facing homeowners in negative equity; his plans to extend the moratorium on house repossessions; and if he will make a statement on the matter. [36000/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is a particular priority of the Government to ensure as far 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. The preferred method of dealing with cases of arrears should be early intervention and engagement.

The Financial Regulator has a Code of Conduct for Mortgage Arrears. The 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. Under the Code where a borrower is in difficulty the lender shall make every reasonable effort to agree an alternative repayment schedule and he or she has to give consideration, 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 have agreed and put into effect 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.

I therefore have no plans to extend the moratorium on home repossessions. I am satisfied that the arrangements 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.