Michael McCarthy (Cork South West, Labour)
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Question 62: To ask the Minister for Finance the date on which his plans to introduce mortgage interest relief, moratoriums for householders facing eviction, changes to personal bankruptcy laws, and other measures in the programme for Government to assist struggling homeowners will be brought into effect. [8981/11]

Michael Noonan (Limerick City, Fine Gael)
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In the first part of his question the Deputy is referring to the commitment in the Programme for Government to increasing mortgage interest relief to 30% for First Time Buyers who bought between 2004 and 2008 and to finance this in part by abolishing interest relief for new buyers from June 2011. When this proposal has been thoroughly examined and analysed and the findings and recommendations are presented to me, I will decide on the appropriate action to be taken. However, it is unlikely that any measures will be introduced before budget 2012.

As regards changes to personal bankruptcy law, the legislative programme for the Department of Justice and Equality includes a Personal Insolvency Bill that will provide for a new framework for settlement and enforcement of debt and for personal insolvency. The Bill will take into account the recommendations of the Law Reform Commission in its Report on Personal Debt Management and Debt Enforcement of December 2010. The Civil Law (Miscellaneous Provisions) Bill, is in the course of being drafted by the Department of Justice and Equality with a view to publication as soon as possible this year. It will also contain some interim measures in relation to reform of the law on bankruptcy.

As regards assisting struggling homeowners, the Deputy will be aware of the work of the Expert Group on Mortgage Arrears and Personal Debt. This Group 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;

· Borrowers in financial difficulties, but not in arrears, are allowed to come under the MARP; and

· When a lender is determining the 12 month period it must wait before applying to the courts to commence legal action, it must exclude any time period during which a borrower is complying with the terms of an alternative repayment arrangement, making an appeal to the internal appeals Board or making a complaint to the Financial Services Ombudsman under the CCMA.

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 the MARP. Lenders representing the majority of the market have already indicated their willingness to implement the Expert Group's proposals for a Deferred Interest Scheme (DIS) or a variation of it.

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.