Ruairi Quinn (Dublin South East, Labour)
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Question 68: To ask the Minister for Finance the position regarding the work of the interdepartmental and expert mortgage arrears review group; when he expects this group to report and make recommendations; the terms of reference of this group; the reason there is no representative from the money advice and budgeting service in this group; if this apparent anomaly is set to be rectified; if he plans to introduce interim measures to relieve financial pressure on homeowners in arrears; the updated estimate of the number of homeowners in arrears and in negative equity; and if he will make a statement on the matter. [11644/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, on 25th February 2010, I informed the Government of my proposals regarding expanding the membership of the Interdepartmental Mortgage Arrears Group, under the Chairmanship of Mr. Hugh Cooney who is an insolvency accountant. The other external members are as follows:

The Group will also include senior officials of the Departments of Finance, Taoiseach, Justice Equality and Law Reform, Social and Family Affairs, Communications Energy and Natural Resources, and Environment Heritage and Local Government. I am satisfied that the external members of the Group have the relevant expertise in areas relating to mortgage arrears and personal debt. In addition to the expertise of its own members the Group will be calling on others to provide it with material, covering all relevant areas, and this will naturally include the experiences of MABS in dealing with homeowners in arrears. The revamped Group had its first meeting on March 5th and is finalising the terms of reference. In general, the terms of reference will reflect the commitments made by the Government both in the Renewed Programme for Government and in subsequent Government decisions relating to the issues of mortgage arrears and personal debt.

The Group will focus initially on bringing forward recommendations in dealing with the mortgage arrears problem and will later address the personal debt issue. I expect that these recommendations will be made to me on a rolling basis as the Group progresses with its review. I will then consider the merits of each of the recommendations before deciding on whether to submit to Government for decision. The Deputy will be aware that the Financial Regulator recently published data on mortgage arrears for the period ended December 2009. As at December 2009, 28,603 mortgage accounts were in arrears for more than 90 days, of which 19,185 were more than 180 in arrears. It should be noted that the number of mortgage accounts is greater than the number of mortgaged homes by 20% or more.

All estimates of the extent of negative equity appear to be based on very general economic assumptions, but it is very difficult to assess realistic price levels when property market activity remains low. In any event, being in negative equity does not change the level of mortgage payments, so the problems it may cause are more long-term and should be considered on that basis. The Financial Regulator has estimated that only a small proportion of borrowers with the covered institutions who are in negative equity are in arrears on their payments.