Terence Flanagan (Dublin North East, Independent)
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96. To ask the Minister for Finance his views on the number of households in mortgage arrears; his further views on bank targets to restructure mortgage books; and if he will make a statement on the matter. [54953/13]

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

The Deputy will be aware that the Central Bank recently published mortgage arrears and restructure statistics for the quarter ending September 2013 ( ). This publication shows an overall decline in the stock of principal dwelling houses (PDH) in arrears of one per cent relative to the end of June 2013 statistics. This is the first decrease in the outstanding balance since the Central Bank series began in September 2009. In addition, early arrears have declined significantly during the reporting period with a quarter-on-quarter fall of six per cent. This would appear to demonstrate some success by the lenders in addressing the accounts in early arrears and putting in place appropriate measures to prevent borrowers from going into arrears.

Separately from the Central Bank quarterly reports, a monthly reporting regime on mortgage restructures has been in place by my Department for the last three months ( ) This data, which represents approximately 90% of the mortgage market, shows a continuing decline in PDH mortgage arrears and an increase in the number of permanent restructures to address mortgages in difficulty. The recently published data by my Department, which is for the end of October, shows that the number of PDH mortgage accounts in arrears of greater than 90 days fell from 82,624 accounts in August to 80,854 at the end of October, a drop of 1,770 accounts in arrears.

The Deputy will also be aware that Central Bank’s Mortgage Arrears Resolution Targets (MART) announced last March, set time bound and measurable targets for the main banks, requiring them to systematically address their arrears book. This is a very important step to resolve the impasse in arrears. The Central Bank required the main mortgage lenders to propose by end-June 2013 sustainable solutions to 20% of mortgages in arrears (over 90 days) and to 30% by the end of September, The target rises to 50% by the end of December 2013, 70% by end of March 2014 and to 75% by the end of June 2014. The Central Bank is now also requiring banks to conclude sustainable solutions with 15% of their customers by the end of this year, with 25% by end March 2014 and 35% by end of June 2014.

As part of this process, the Central Bank conducted an audit of the banks’ Quarter 2 proposed solutions which examined the banks’ processes of determining and proposing sustainable solutions against the Central Bank’s sustainability guidelines. The Central Bank has informed me that a number of issues were identified in this audit and which will need to be addressed by the banks to ensure that the solutions being proposed are sustainable in the long term. However, it also concluded that the issues arising did not result in any bank failing to reach the Quarter 2, 2013 target. Lenders have also reported that they have met and exceeded the Q3 target. The Central Bank has advised me that audits will be on-going in 2014.

The remaining key elements of the mortgage arrears resolution strategy are also now in place. For example, the new insolvency options provided for in the Personal Insolvency Act are now fully available to debtors; the mortgage advisory function is fully operational, and, following a recent review may be enhanced; the mortgage to rent scheme is also operational.

Therefore the overall elements of the framework for dealing with mortgage distress are now in place. Banks should continue to deal with this issue in a structured and proactive manner through engagement with their borrowers and in alignment with the Mortgage Arrears Resolution Targets set by the Central Bank.