Bernard Durkan (Kildare North, Fine Gael)
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Question 88: To ask the Minister for Finance the extent the lending sector has accommodated or is willing to accommodate those with mortgage arrears; if the total number of households now in such arrears can be identified accurately; if the financial institutions are prepared to accept any culpability for the current levels of arrears in view of the abandonment of good lending practices in the preceding years; if it is recognised that a major implosion in terms of mortgage lending could occur if these issues are not addressed, with particular reference to the issue of the application of compound interest, which makes it impossible for those with mortgage debt to recover; if new guidelines can be set out or arrangements entered into to address such issues; and if he will make a statement on the matter. [27897/11]

Michael Noonan (Limerick City, Fine Gael)
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I wish to advise the Deputy that lenders representing the majority of the market have already implemented or indicated their willingness to implement a Deferred Interest Scheme (DIS) or a variation of it, as recommended by the Expert Group on Mortgage Arrears and Personal Debt. A DIS is intended to allow borrowers, subject to certain criteria being satisfied, to pay at least 66% of their mortgage interest but less than 100%. Payment of the balance may be deferred for up to 5 years. In addition to the DIS, all mortgage lenders are obliged to adhere to the requirements of the Central Bank's Code of Conduct on Mortgage Arrears (CCMA). The Code sets out specific requirements that mortgage lenders must adhere to when dealing with borrowers in arrears and those at risk of falling into 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 front-line 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 involved. The revised CCMA also introduced the Mortgage Arrears Resolution Process framework for the handling of arrears and pre-arrears cases. Provision 9 of the 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)".

Full details of the Code of Conduct on Mortgage Arrears and on the Mortgage Arrears Resolution Process may be found on the Central Bank's website: www.centralbank.ie.

I would like to inform the Deputy that figures published by the Central Bank on 29 August 2011, show that, at the end of June 2011, there were 777,321 private residential mortgage accounts held in Ireland, to a value of 115 billion euros. Of these, 55,763 accounts, or 7.2%, were in arrears for more than 90 days. Of the 55,763 mortgage accounts in arrears, because of remortgages, top-ups etc., the actual number of households in arrears is somewhat lower with the Central Bank estimating the household number to be of the order of 45,000.

The Central Bank's press release dated 29 August 2011 is available on the Central Bank's website.

The Government is acutely aware of the increasing financial stress that some householders are facing arising from difficulty in meeting their mortgages commitments. Against this background, the Government's Economic Management Council, requested an Inter-Departmental Group to consider further necessary actions to alleviate the increasing problem of mortgage over-indebtedness and to report to it by end of September.

The outcome of the work carried out by the Group, which was chaired by my Department and comprised of representatives from other relevant Departments, the Central Bank and expertise from the banking sector, has been presented to the Economic Management Council. I will bring the Report to Cabinet next week, after which it will be published. My preference is that the Dáil will be given an opportunity to debate fully the contents and findings soon thereafter.