Billy Timmins (Wicklow, Fine Gael)
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Question 51: To ask the Minister for Finance his views on a matter (details supplied) regarding mortgages here; and if he will make a statement on the matter. [30457/11]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised by the Central Bank that a decision has been taken to require any bank that has received Government capital support to provide an impact analysis of any proposed standard variable mortgage rate increase in terms of the implications for its arrears position and future capital requirements. The Central Bank has also indicated that the Board of Directors of such a bank must, in future, review and approve this analysis to ensure that proper attention is given to the costs of such actions. The Deputy may wish to refer to the address given by Mr Matthew Elderfield, Deputy Governor of the Central Bank to the Association of Compliance Officers in Ireland at University College Cork on 14 October 2011. This can be accessed on the Central Bank's website www.centralbank.ie.

It would not be realistic to expect a lender to fix mortgage interest rates for a period of twenty years. This is because the cost of funds is not fixed for such a long period. Non-recourse mortgages are not a practical solution to the mortgage arrears problem. There are accrued property rights which subsist as a consequence of existing property mortgages; legislation to alter such mortgage contracts could raise constitutional issues. Also the provision of non-recourse mortgages carries a higher level of risk for lenders. This risk would likely be reflected in higher costs to borrowers in the future. The Deputy may also wish to be aware of the recent publication of the Report of the Inter-Departmental Mortgage Arrears Working Group. This report was discussed in the Dail on 18 and 20 October 2011.