Róisín Shortall (Dublin North West, Independent)
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252. To ask the Minister for Finance his response to the proposal made in a newspaper article (details supplied) in relation to the deferral of mortgage debt. [19030/13]

Michael Noonan (Limerick City, Fine Gael)
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The Government is very aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty. Building on the 2011 ‘Keane Report’, the Central Bank, under its MARS project, has for some time been intensively working with lenders to ensure that they can offer a range of longer term forbearance options to their customers who are experiencing mortgage difficulty. The Deputy will be further aware that, on 13 March 2013, the Central Bank announced additional measures to address mortgage arrears, including the publication of performance targets for the main mortgage banks. This new approach is aimed at ensuring that banks offer and conclude sustainable solutions for their customers in arrears by setting specific performance targets and proposing revisions to provisioning standards.

Performance targets have been set for: ACC, AIB, Bank of Ireland, KBC Bank Ireland, Permanent TSB, and Ulster Bank. The Central Bank will also, over the coming period, set targets for the conclusion of durable solutions and for the sustainability of such solutions. Arrangements will be put in place to audit and monitor progress made against these targets.

The overall objective of this process is to ensure banks offer, where it is appropriate to do so in the circumstances of an individual case, durable and sustainable solutions to their mortgage customers who are in arrears. In that regard, in addition to the existing forbearance arrangements such as term extensions or reduced payments that were being deployed, the Keane Report outlined other long term forbearance/resolution options such as split mortgages, sale by agreement, and trade down mortgages that could be utilized. The Report also recognised that lenders could develop other possible options in this area for use by their customers. The particular option suggested in the newspaper article would, in broad terms represent a payment holiday and extension of term for the borrowers involved.

It should be noted that in the latest Central Bank statistics on mortgage arrears published on 7 March, under the Central Bank’s own assessment of permanent resolution options, some 13,396 such restructures of primary dwelling homes were classified as term extension. The new Central Bank targets and associated auditing requirement will provide additional information on such restructures over the coming months.