Bernard Durkan (Kildare North, Fine Gael)
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Question 48: To ask the Minister for Finance if he has received any communications from the banking or lending sectors with a view to achieving a basis for addressing the ever increasing issue of mortgage arrears which has been exasperated by unemployment and negative equity; if any progress can be made towards the elimination of compound interest being applied which in turn reduces the capacity of the borrower to resolve a debt problem; if any progress has been or can be made towards putting in place a mechanism that will at least give a householder with mortgage arrears a reasonable chance of regaining control over mortgage debt; and if he will make a statement on the matter. [18529/11]

Michael Noonan (Limerick City, Fine Gael)
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The revised Code of Conduct on Mortgage Arrears (CCMA) was issued to all mortgage lenders in December 2010 and has been effective since 1 January 2011. The CCMA sets out how mortgage lenders must treat borrowers in or facing mortgage arrears. The CCMA requires that each lending branch must have at least one person with specific responsibility for dealing with arrears and pre-arrears cases. It also requires frontline staff to be made aware of the lender's policy for dealing with arrears and pre-arrears cases and the relevant contact person and process. The revised CCMA also introduced the Mortgage Arrears Resolution Process (MARP) framework for handling of arrears and pre- arrears cases.

Provision 9 of the revised CCMA states that "Lenders are restricted from imposing charges and or surcharge interest on arrears arising on a mortgage account in arrears to which this Code applies and in respect of which a borrower is co-operating reasonably and honestly with the lender in the Mortgage Arrears Resolution Process. (Lenders will have been notified individually of the charges to which this applies) ."

The Central Bank issued Letters of Direction in December 2010 to mortgage lenders prohibiting them from imposing specific arrears charges or surcharge interest on mortgage accounts in arrears to which the revised CCMA applies and in respect of which a borrower is co-operating reasonably and honestly with the lender in the MARP from 1 January 2011.

With regard to monitoring compliance with the consumer protection codes, the Central Bank carries out themed inspections and mystery-shopping exercises. On 1st July 2011 the Central Bank published the findings of a themed inspection of mortgage lenders which examined compliance with Provision 9 of the revised CCMA and the Letters of Direction. This themed inspection was carried out across six mortgage lenders including credit institutions and retail credit firms. 655 customer mortgage account statements were reviewed during the course of the themed inspection. Further detail can be found at the following link: http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankMonitorsLendersCompliancewiththeRevisedCode.aspx .