Denis Naughten (Roscommon-South Leitrim, Independent)
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Question 30: To ask the Minister for Finance his plans to assist families in mortgage difficulty; the discussions, if any, he is planning with the Irish Financial Services Regulatory Authority on this issue; and if he will make a statement on the matter. [9886/12]

Michael Noonan (Limerick City, Fine Gael)
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The Government is acutely aware of the increasing financial stress that some households are facing arising from difficulty in meeting their mortgage commitments. The Government, therefore, has established a Steering Group, on which the Central Bank is represented, to oversee and drive the implementation of the recommendations contained in the report of the Inter-Departmental Working Group on Mortgage Arrears across Government. Significant progress has already been achieved across a number of the individual work areas including the publication of a draft Personal Insolvency Bill by the Minister for Justice, Equality and Defence and the announcement of the first "mortgage to rent" transaction by the Minister for Housing and Planning. The Central Bank, both from a consumer protection and prudential regulation perspective, has a very significant role to play in addressing the problem of mortgage arrears. With regard to consumers in arrears or in danger of going into financial difficulty and/or concerned about going into mortgage arrears, the revised Code of Conduct on Mortgage Arrears (CCMA) offers increased protections to these consumers. This revised code builds on the provisions of the previous version, but includes more detailed requirements, including the establishment of a formal Mortgage Arrears Resolution Process (MARP). Other examples of significant changes are:

o pre-arrears cases must be treated in accordance with the MARP;

o arrears have been defined;

o the primary residences which can be protected by the CCMA have been defined; and

o an Appeals process under the CCMA replaces the complaints process under the Consumer Protection Code.

The Central Bank has also published a guide for consumers on mortgage arrears 'Mortgage Arrears – A Consumer Guide to Dealing with your Lender' and this is available on the Central Bank website:- http://www.centralbank.ie/regulation/processes/consumer-protection/documents/consumer%20booklet%20-%20final%20feb%202011.pdf.

With regard to monitoring compliance with the consumer protection codes, the Central Bank carries 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 the requirement of the revised CCMA specifically relating to charges on mortgage accounts in arrears, and the related Letter of Direction ('Direction'). The Direction instructed mortgage lenders to refrain from imposing interest surcharge on arrears and other specific charges arising on a mortgage account in arrears to which the revised CCMA applies and in respect of which a borrower is co-operating reasonably and honestly with the lender in the MARP from 1 January 2011. Provision 9 of the CCMA refers to the restriction from imposing such charges. Lenders were individually notified of the charges to which this Provision applies in the individual Direction that issued in December 2010. This themed inspection was carried out across six mortgage lenders including credit institutions and retail credit firms. 655 customer mortgage account statements were reviewed during the course of the themed inspection. A further direction was issued to lenders in December 2011 restricting some further charges. Further detail can also be found on the Central Bank website:- http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankMonitorsLendersCompliancewiththeRevisedCode.aspx.

In addition, in October 2011 the Central Bank required each mortgage lenders to develop strategies and implementation plans to deal with their individual mortgage arrears situations. The Central Bank is currently reviewing the strategies as submitted and is examining the plans of lenders to offer appropriate longer term solutions, such as those recommended in the Inter-Departmental Mortgage Arrears Working Group report and other options that banks may develop themselves, for their customers who may have unsustainable mortgages. The Central Bank is continuing to engage with lenders on the further development and implementation of these plans.