Paschal Donohoe (Dublin Central, Fine Gael)
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To ask the Minister for Finance if the Central Bank of Ireland code of practice on the transfer of mortgages which states that a loan secured by the mortgage of residential property may not be transferred without the written consent of the borrower must be adhered to by non domestic Irish financial institutions including Lloyds TSB and RBS; if the Central Bank of Ireland code of practice on the transfer of mortgages applies to buy to let loans secured on residential properties; if the Central Bank of Ireland code of practice on the transfer of mortgages applies to non-Irish residential properties; and if he will make a statement on the matter. [53421/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised by the Central Bank that the ‘Code of Practice on the Transfer of Mortgages’ is a voluntary code. The Code was issued by the Central Bank in 1991 to financial institutions involved in the provision and transfer of mortgage credit. A copy of the Code and a list of regulated financial institutions are available at www.centralbank.ie. As the Code is voluntary, it is not subject to the Central Bank’s administrative sanctions procedure.

The Code states that it applies to a loan secured by the mortgage on residential property. I have also been advised by the Central Bank that, for the purposes of the Code, residential property is not limited to the principal private residence of the mortgagor. Therefore, the Code may be applied, on a voluntary basis, to mortgage arrangements on a residential property that is intended for letting or on a residential property that is located abroad.

Notwithstanding its voluntary nature, I expect that best practice dictates that the Code be applied by all institutions to all classes of residential property.