Michael Conaghan (Dublin South Central, Labour)
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Question 626: To ask the Minister for the Environment, Community and Local Government the guidance he is giving to local authorities regarding mortgage arrears on local authority mortgages and shared ownership schemes; and if he will make a statement on the matter. [27207/12]

Michael Conaghan (Dublin South Central, Labour)
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Question 627: To ask the Minister for the Environment, Community and Local Government the guidance he is giving to local authorities regarding mortgage to rent on local authority mortgages and shared ownerships schemes; and if he will make a statement on the matter. [27208/12]

Jan O'Sullivan (Limerick City, Labour)
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I propose to take Questions Nos. 626 and 627 together.

The Government is acutely conscious of the difficulties many households are facing in terms of mortgage arrears. Where any borrower, either from a local authority or from a private financial institution, is facing difficulties in meeting mortgage repayments, they should engage proactively and constructively with the lender to seek to achieve an agreed solution. The services of the Money Advice and Budgeting Service are also available to such borrowers and support is available through the Supplementary Welfare Allowance Scheme.Provisions regarding lending by local authorities for the purposes of house purchase are set out in section 11 of the Housing (Miscellaneous Provisions) Act 1992. Where a loan stands in default, section 11(10) provides that a local authority may make such monetary arrangements with a borrower as they consider equitable to take account of the particular circumstances of the borrower.

In addition, my Department issued comprehensive guidance to local authorities on the treatment of mortgage arrears, including local authority mortgages for shared ownership transactions, in March 2010. That guidance was closely based on the Central Bank's first statutory Code of Conduct on Mortgage Arrears to ensure that cases of local authority mortgage arrears are handled in a manner that is sympathetic to the needs of the particular household, while also protecting the position of the local authority concerned.

To reflect the content of the Central Bank's revised Code of Conduct – which replaced the previous code from 1 January 2011 and was informed by the deliberations of the Expert Group on Mortgage Arrears and Personal Debt – my Department is currently preparing updated guidance to local authorities in consultation with the City and County Managers Association.

This guidance will issue shortly and will include a common Mortgage Arrears Resolution Strategy. This will provide for the options available to distressed borrowers from private lenders to continue to be made available to distressed local authority borrowers also.