Liam Twomey (Wexford, Fine Gael)
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Question 18: To ask the Minister for Finance his plans to introduce legislation for non-recourse mortgages; and if he will make a statement on the matter. [5524/12]

Michael Noonan (Limerick City, Fine Gael)
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I have no plans to introduce legislation to promote non-recourse mortgages. There are accrued property rights which subsist as a consequence of existing property mortgages; legislation to alter such mortgage contracts could raise constitutional issues.

The Deputy might wish to note that 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.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 19: To ask the Minister for Finance if he is satisfied that financial institutions, particularly those in the sub-prime sector, are fully adhering to the required code of conduct in respect of dealing with people in difficulties with their mortgages; and if he will make a statement on the matter. [5635/12]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's Code of Conduct on Mortgage Arrears (the Code) applies to mortgage lending activities with borrowers in respect of their principal private residence in the State. Compliance with the Code is mandatory on all mortgage lenders registered with the Central Bank. These lenders include sub-prime lenders registered with the Central Bank. The Code provides a number of protections to borrowers. These include the establishment of a formal Mortgage Arrears Resolution Process (MARP) to deal with mortgage customers who are in arrears or in pre-arrears, the establishment of a dedicated Appeals Support Unit and a separate internal appeals process by lenders to deal with individuals on a case by case basis. A copy of the Code is available on the Central Bank's website www.centralbank.ie.

The Central Bank has advised me that in monitoring compliance with their consumer protection codes, they carry out themed inspections and mystery shopping exercises. In July 2011, the Central Bank published the findings of a themed inspection of mortgage lenders which examined compliance with provision 9 of their Code of Conduct on Mortgage Arrears and related individual Letters of Direction that were issued in December 2010. Provision 9 of the Code restricts lenders from imposing charges and/or surcharge interest on arrears outstanding in MARP cases. The Central Bank notifies each lender individually of the charges to which provision 9 applies by means of a letter of Direction. The issues found as a result of the inspection impacted on almost 3,100 mortgage accounts which were overcharged by nearly 70,000 euros. In a press Release dated 1 July 2011 on the results of the themed inspections, the Central Bank stated that all amounts overcharged were refunded and that the system errors were corrected.