Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 114: To ask the Minister for Finance his views on the fact that borrowers remain liable for any outstanding debts and related costs following the repossession of their homes in a context of growing mortgage arrears, negative equity, pay cuts and unemployment; and if he will take legislative or other steps to address this matter. [15874/10]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 116: To ask the Minister for Finance if he will take the legislative or other steps necessary to oblige banks availing of NAMA to write off the difference between the purchase price of the dwelling and its current market value for those households with mortgages taken out on primary residences since 2004 up to €500,000 in view of the growing negative equity problems in conjunction with mortgage arrears. [15876/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 114 and 116 together.

There have been a number of developments relating to the Government's commitments in the Renewed Programme for Government dealing with Protecting the Family Home and Helping Those in Debt. In particular I refer to the recent establishment of the expert group on Mortgage Arrears and Personal Debt (Group) under the Chairmanship of Mr Hugh Cooney.

The Group's Terms of Reference which I approved were incorporated into the supplementary documentation for my Statement on Banking which I delivered to this House on 30 March 2010. This expert Group has commenced its work, and 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 the Group's recommendations will be made to me on a rolling basis as the Group progresses with its review with a final report on the mortgage arrears issues completed by end June 2010. I will then consider the merits of each of the recommendations before deciding on whether to submit to Government for decision. The Deputy will appreciate that all proposals will need to be fully costed before being recommended to Government and will also have to represent value for money from the point of view of the Government and taxpayers.

I am confident that the Group will, as part of its important work, examine all realistic options available to assist mortgage holders and those who are in debt during this difficult economic period, without raising concerns in the international markets about the quality of the mortgage loan books.

The Deputy will be aware that mortgage financing is typically a long-term contract, which involves a balance of obligations between lender and borrower. Home buyers are able to obtain mortgage finance at a price far below that of other lending largely because the loan is secured on the property. Major alterations to the nature of mortgage contracts would mean that mortgages would become much more expensive to buyers.

Question No. 115 answered with Question No. 112.

Question No. 116 answered with Question No. 114.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 117: To ask the Minister for Finance if he will consider banning the charging of penalty interest on mortgage arrears. [15877/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Financial Regulator has statutory responsibility for the regulation of non-interest related banking charges under Section 149 of the Consumer Credit Act 1995. Credit institutions are obliged to seek the prior approval of the Regulator before any increase in such fees. I, as Minister for Finance have no role in the matter. For the purposes of Section 149 a charge includes a penalty interest in respect of arrears on a loan.

My Department has however been advised by the Financial Regulator that it is concerned that mortgage lenders treat their customers fairly.

In December 2009, the Financial Regulator wrote to mortgage lenders about the charges they impose in respect of mortgage arrears. In that letter the Financial Regulator said that while such charges may have been approved under Section 149 it was requesting lenders to impose charges only where they could be justified, having considered the individual consumer's circumstances. Also in that letter the Financial Regulator reminded lenders of the requirement of the Financial Regulator's "Code of Conduct on Mortgage Arrears" to handle arrears cases sympathetically and positively with the objective of assisting consumers to meet their obligations. The Financial Regulator also indicated that any charges that are applied must be based only on the costs incurred by the institution in managing the arrears case. It requested institutions to consider not applying arrears charges where the consumer is unable to make repayments in the immediate term due, for example, to job loss.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 118: To ask the Minister for Finance if the expert group set up to investigate the issue of increasing mortgage arrears has reported any interim findings or recommendations; and if so, if he will give details of same; and if not, when such a report is expected. [15878/10]

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 to extend the membership of the then Interdepartmental Mortgage Arrears Group to include external experts under the Chairmanship of Mr. Hugh Cooney an insolvency accountant. The external members of this expert group (Group) were selected on the basis of their individual expertise in areas relating to mortgage arrears and personal debt.

As of today's date (21st April 2010) I have not received any interim findings or recommendations from the Group. The revamped Group has commenced its work, and is meeting regularly. I understand that the emphasis will initially be on exploring the feasibility of a range of possible options for improving the level of mortgage support to homeowners in difficulty. Proposals will be based on factual information gathered by the Group and will take into account the findings of existing reports and mortgage support schemes in operation in other jurisdictions. I expect that these recommendations will be made to me on a rolling basis as the Group progresses with its findings and that a final report on this phase of the review will be ready by end June 2010.