Jack Wall (Kildare South, Labour)
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Question 164: To ask the Minister for Finance his views on a matter (details supplied); if there is any mechanism available to the person to deal with the matter using the method the person proposed or is there any appeal mechanism or review mechanism available to them to deal with same; and if he will make a statement on the matter. [18626/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that I cannot comment on individual cases.

The Deputy will be aware of the work of the Expert Group on Mortgage Arrears and Personal Debt which published its final Report last November. Since the publication of the Group's Report, the Central Bank has revised its Code of Conduct on Mortgage Arrears to reflect many of the Expert Group's recommendations including key recommendations relating to the introduction by all regulated lenders of a standardized Mortgage Arrears Resolution Process (MARP). It is important to point out that borrowers who are in financial difficulties, but not in arrears, are allowed to come under the MARP.

I also refer to the Deputy to the Expert Group's comments on the potential to improve the position of some mortgage holders who are in negative equity where households would be willing to trade-down. Trading down would produce a reduction in mortgage debt and more affordable monthly payments. The Group noted that "for some mortgage holders who are in negative equity, trading down would produce a reduction in mortgage debt and more affordable monthly payments. The Group recommends that further consideration should be given by lenders to facilitating trading down by borrowers in this situation. Such options would have to meet relevant prudential standards, with appropriate controls in place, and be in the customers' best interest."

Trading down involves selling a current property and buying a cheaper one. Trading down may be an option to reduce the level of mortgage repayments, resulting in more affordable monthly repayments. The Group's recommendation was aimed at helping mortgage holders remain as home owners while reducing their level of repayments. There will also be situations where mortgage holders in negative equity may wish to move home, for example, to take up new employment opportunities. There is merit in facilitating house moves by those in negative equity in certain situations and subject to certain criteria set down by the Central Bank. Ultimately, these are matters for lenders and the Central Bank to decide upon. Any lender planning to provide a negative equity type product must notify the Central Bank in advance to ensure that appropriate measures and controls are taken, as the Central Bank must be satisfied that such a product meets relevant prudential standards and does not lead to consumers being over exposed.