Joanna Tuffy (Dublin Mid West, Labour)
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Question 74: To ask the Minister for Finance if he has any plans to assist mortgagees in negative equity; and if he will make a statement on the matter. [3174/12]

Michael Noonan (Limerick City, Fine Gael)
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I have no plans to introduce a general scheme to assist mortgage holders in negative equity. Trade down mortgages, in appropriate circumstances, were recommended in the report of the Inter-Departmental Mortgage Arrears Working Group. This Group reported in October 2011. In order to ensure that proposals in relation to such mortgages are consistent with the Central Bank's consumer protection and prudential policy objectives, a maximum loan to value ratio and other parameters would need to be agreed between mortgage lenders and the Central Bank.

The Central Bank has advised me that they wrote to all mortgage lenders to ascertain whether they were offering, or intended to offer, a mortgage product that would allow home owners to sell their existing home and transfer the negative equity portion of the original loan to the new loan. In response to the Central Bank's letter, only a small number of mortgage lenders said that they would consider offering such a facility. A trial period commenced in mid-2011 and was due to be assessed by the Central Bank and the institutions involved before the end of 2011. However, the low level of activity made it difficult to conduct a meaningful review at the end of 2011. Therefore, the proposed review will not take place until later this year. Any institution offering such a mortgage facility may do so only in accordance with criteria agreed with the Central Bank. In the circumstances, any further consideration of introducing this facility may only be undertaken on completion of the Central Bank's review.