Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 30: To ask the Minister for Finance his plans to assist families in mortgage difficulty; the discussions he is planning with the Irish Family Services Regulatory Authority on the issue; and if he will make a statement on the matter. [5412/11]

Michael Noonan (Limerick City, Fine Gael)
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As agreed in the Programme for National Recovery 2011 to 2016, the Government will examine a number of proposals aimed at helping mortgage-holders in difficulty. These will include: increasing mortgage interest relief to 30% for first time buyers in 2004-2008 (from the current sliding scale of 20% to 25% depending on the year the mortgage was taken out), financed in part by bringing forward the abolition of relief for new buyers from June 2011. Directing any mortgage provider in receipt of State support to present Government with a plan of how it intends to cut its costs, over and above existing plans, in a fair manner by a sufficient amount to forego a 25 basis point increase on its variable rate mortgage. Introducing a two year moratorium on repossessions of modest family homes where a family makes an honest effort to pay their mortgage. Fast-tracking personal bankruptcy reform needed to bring Ireland into line with best international standards, such as introducing a flexible discharge period for "honest bankrupts", defined as one that has materially complied with the tax, NAMA and companies Acts among others. Converting the Money Advice and Budgeting Service into a strengthened Personal Debt Management Agency with strong legal powers. The agency will support families who make an honest effort to deal with their debts, including non-mortgage debt, providing protection from their creditors where appropriate, so that they have time to sort out their affairs. In order to do so, the Personal Debt Management Agency will have quasi-judicial status. Making greater use of mortgage interest supplement to support families who cannot meet their mortgage payments is a better and cheaper option than paying rent supplement after a family loses their home.

The Deputy will be aware that the Expert Group on Mortgage Arrears and Personal Debt produced two reports, an interim report published in July 2010 and a final report published in November 2010. All of the expert group's recommendations are listed in Chapter 2 of the final report. They can be accessed at www.finance.gov.ie

Since the publication of the reports, the Code of Conduct for Mortgage Arrears (CCMA) has been revised by the Central Bank to reflect many of the recommendations of the expert group including key recommendations relating to the introduction by all regulated lenders of a standardised Mortgage Arrears Resolution Process (MARP). The most significant changes in the revised CCMA include: borrowers in arrears who co-operate with the Mortgage Arrears Resolution Process (MARP) are not charged penalty interest charges; harassment of borrowers through unsolicited communications is outlawed; and borrowers in financial difficulties, but not in arrears, are allowed to come under the MARP.

The revised CCMA was published on 6 December 2010 and came into effect on 1 January 2011. The revised CCMA can be accessed at www.centralbank.ie. Lenders are required to comply with the CCMA as a matter of law but have been given a period of six months grace ending on 30 June 2011 to put in place the requisite systems and training of staff necessary to support the implementation of the MARP. In addition, the Central Bank has also written to lenders to issue directions under section 149 of the Consumer Credit Act 1995 which will mean that lenders cannot impose arrears charges or penalty interest on borrowers who are co-operating with MARP.

The Deputy will also be aware of the existing importance of the mortgage interest supplement (MIS) scheme and the Money Advice and Budgeting Service (MABS) in assisting consumers who have fallen into arrears or who are experiencing difficulties servicing their mortgage repayments. The MIS scheme currently supports approximately 18,000 mortgage-holders while MABS provides a national, free, confidential and independent service operating from 53 offices nationwide.