Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 140: To ask the Minister for Finance the number of home mortgages which were approved by the Irish banks in each of the past ten years; the average amount of money approved in each case; and if he will make a statement on the matter. [18353/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

According to statistics published by the Department of Environment, Community and Local Government on 1 June 2011, approximately 790,000 mortgages were approved by banks and building societies in Ireland between and including the years 2001 to 2010. This information relates to loans for the purpose of financing the purchase of a home (houses and apartments) including residential investment property (which must involve the transfer of ownership) or building of a new home. Loans approved for the purpose of refinancing existing loans whether with the same or a different lender, or loans involving a new increased mortgage or house improvements are not included in these figures. The Deputy should note that if a borrower was approved for a mortgage by 4 different lenders, these 4 mortgage approvals will be included in the figures. Further information is available on www.environ.ie. The average loan size:

· In 2001 €126,000

· In 2002 €154,000

· In 2003 €178,000

· In 2004 €202,000

· In 2005 €231,000

· In 2006 €274,000

· In 2007 €271,000

· In 2008 €271,000

· In 2009 €230,000

· In 2010 €208,000

The number of mortgage approvals:

· In 2001 69,000

· In 2002 93,000

· In 2003 98,000

· In 2004 104,000

· In 2005 120,000

· In 2006 114,000

· In 2007 89,000

· In 2008 56,000

· In 2009 29,000

· In 2010 20,000

The figures detailed above are based on data supplied by the following banks and building societies; Bank of Ireland, Mortgage Bank, Allied Irish Banks, National Irish Bank, Ulster Bank, Bank of Scotland, Permanent TSB, KBC Bank, First Active, E.B.S. (Including Haven), Irish Civil Service and Irish Nationwide

Since 2006, the Irish Banker's Federation has published a quarterly report on mortgage lending by its members which is available on its website (www.ibf.ie ).

Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 141: To ask the Minister for Finance if his attention has been drawn to the fact that Irish banks are not approving mortgages for applicants who are employed on contract; and if he will make a statement on the matter. [18354/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

Each mortgage provider is responsible for evaluating the capacity of the borrower to manage and repay the loan and it would be normal that the employment status of the applicant would be one factor taken into account. The mortgage provider must have regard to the Central Bank's Consumer Protection Code (the Code) which is a set of general principles combined with more detailed requirements in certain areas. It requires financial institutions to act in the best interests of their customers by selling them products that are suitable, explaining why the products offered are suitable and treating customers fairly if things go wrong. The lending institution must comply with the general principles of the Code in all its dealings with customers. When providing a product or service to the consumer, a financial institution must comply with the 'Knowing the Consumer' and 'Suitability Provisions' of the Code.

The Knowing the Consumer process involves, inter alia, gathering relevant information from the consumer about his/her financial situation, individual circumstances and needs. Based on this information the financial institution is required to complete a suitability assessment where only products suitable to that particular consumer are offered.

While affordability is a prime component of suitability, a fuller consideration of a consumer's individual circumstances and needs would be required in order to comply with the Suitability Provisions of the Code. In this regard, when assessing suitability in relation to mortgage products, the Central Bank is of the opinion that factors such as - but not limited to - employment, income and repayment capacity, purpose of borrowings, type and length of loan, plans for early redemption, attitude to fixed/variable interest, age, savings track record and loan to value ratio, should be considered. As suitability is specific to the circumstances and needs of each individual consumer, financial institutions should be satisfied that written statements reflect an assessment of each individual consumer's specific circumstances and needs, thereby meeting the Knowing the Consumer requirements of the Code.

It should be noted that the Code is currently being reviewed and a second consultation on the review of the Code is now underway.

Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 142: To ask the Minister for Finance his plans to introduce an independent appeals mechanism for applicants who have been refused home mortgages by Irish banks; and if he will make a statement on the matter. [18355/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

I do not plan to introduce an independent appeals mechanism specifically for applicants who have been refused home mortgages by Irish banks. I believe that mortgage lending must be undertaken on a sustainable and prudential basis by financial institutions and conform fully with regulatory requirements both in relation to the financial institution itself and also the safeguarding of the consumer's interests.

The decision on whether or not to grant individual mortgages must remain a commercial decision for individual lending institutions. It is important that each lending institution is allowed to assess properly and independently the individual risks that it is considering accepting.

The Government must maintain a balance between the support provided for individual banks and financial service providers generally through the bank guarantee scheme, other financial support incentives and broader public policy provisions, while at the same time ensuring that the day to day running of these institutions has regard to competition, market conditions and the need to develop stable commercial enterprises to meet the long term credit needs of households and businesses in the Irish economy. Consequently outside pressure should not be put on mortgage lenders to accept or reject individual mortgage applications.

However, if a consumer feels that he or she has been improperly treated, or that he or she has grounds for complaint for some other reason, then a complaint may be made directly to the financial institution concerned. If the consumer is not satisfied with the response received from the institution, there may be grounds to forward the complaint to the Financial Services Ombudsman (FSO), who has statutory powers to investigate complaints against financial service providers. The FSO will only consider a case once the internal complaints procedure within the financial institution concerned has been followed.