Eamon Gilmore (Dún Laoghaire, Labour)
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Question 27: To ask the Minister for Finance if he will introduce a two year moratorium on family home repossessions; and if he will make a statement on the matter. [44870/09]

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.

In the revised Programme for Government we have stated that we will be: · Introducing new measures to protect families having difficulties with their home mortgage payments; · Examining ways of expanding the existing options available for dealing with debt situations; · Examining ways of expanding existing state sponsored mortgage-support measures.

The commitments contained in the revised Programme for Government span the broad area of personal debt management and its legislative framework and, as several relate to the responsibilities of several Government Departments, they will require close collaboration in the period ahead. In this regard, on foot of a Government decision, an interdepartmental working group has been established to specifically look into possible options to assist mortgage-holders in arrears.

The Law Reform Commission's recently published Consultation Paper on Personal Debt Management and Debt Enforcement has made an important contribution to this whole area. The Government are carefully examining their recommendations and relevant officials will be closely liaising with the LRC in regard to its remaining body of work.

In relation to the position of mortgage holders generally, the Irish Bankers Federation published a Statement of Intent on 10 November which provides further reassurance to homeowners who find themselves genuinely unable to maintain mortgage repayments on their principal private residence. The Statement of Intent has been agreed and supported by all IBF members and is a welcome development. It is also welcome that the IBF Oversight Committee on the implementation of the Statement of Intent will include representation from the Money Advice and Budgeting Service (MABS).

This follows on from the IBF and the Money Advice and Budgeting Service (MABS) Operational Protocol on consumer debt, which was recently put into effect. The Operational Protocol will enable MABS and the IBF to continue to work together effectively when dealing with debt problems of personal debtors who approach the MABS Service for assistance.

It should be noted that there are already other important arrangements in place to assist consumers who have fallen into arrears or are in danger of falling into arrears.

The Government provides support for payment of mortgages under the Mortgage Interest Supplement Scheme. This scheme is administered by the Community Welfare Service on behalf of the Department of Social and Family Affairs. It provides assistance where the mortgage relates to a person's principal private residence. Furthermore, people in debt or in danger of getting into debt can avail of the services of the Money Advice and Budgeting Service (MABS). This is a national, free, confidential and independent service.

The Financial Regulator's Consumer Protection Code 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 Financial Regulator also has in place a Code of Conduct on Mortgage Arrears. This 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 has to make every reasonable effort to agree an alternative repayment schedule and the lender has to give consideration on a case-by-case basis to alternatives such as deferral of payments, extending the term of the mortgage, changing the type of mortgage, or capitalising arrears and interest. Obviously cases will arise where the arrears persist despite newly agreed changes in repayment schedules. The Code provides that where such situations persist, 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.

Furthermore, as part of their recapitalisation scheme, A.I.B. and Bank of Ireland will not commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing where the customer continues to co-operate with the banks.

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.