Finian McGrath (Dublin North Central, Independent)
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196. To ask the Minister for Finance if he will respond to correspondence (details supplied) regarding distressed mortgage holders; and if he will make a statement on the matter. [24714/14]

Michael Noonan (Limerick City, Fine Gael)
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I have advised the Deputy recently that as statutory regulator of credit institutions, the Central Bank has the power, from both a prudential and consumer protection perspective, to require banks to meaningfully and sustainably address mortgage arrears cases on their books.  The Central Bank's Mortgage Arrears Resolution Targets (MART) process, as announced in March 2013, sets time bound and measurable targets for the main banks requiring them to systematically address their arrears book.  Under this rolling process, quarterly performance targets have been set to require the banks to propose and put in place durable long term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears.  In that context, the Deputy will be aware that the Central Bank has now indicated that it expects that 'proposed' solutions be made in respect of 85% of principal dwelling houses (PDH) and buy-to-let (BTL) arrears cases and that 'concluded' solutions be made with 45% of arrears cases by the end of 2014.  The Deputy will also be aware that the Central Bank has concluded its audit and assessment of a sample of the banks' end 2013 target returns.  Based on the information submitted, the Central Bank has advised that the banks have indicated they have met the targets of proposing solutions to 50% and concluding solutions for 15% of those in arrears greater than 90 days.

The consumer protection provisions of the Central Bank are contained within the Consumer Protection Code and the Code of Conduct on Mortgage Arrears (CCMA).  The CCMA sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their PDH mortgage and it applies to all regulated mortgage lenders. The CCMA is issued under Section 117 of the Central Bank Act 1989 and lenders covered by the Code are required to comply with it as a matter of law.  The Central Bank has the power to administer sanctions for a contravention of this Code.    In relation to buy to let mortgages, the Residential Tenancies Act 2004, which falls within the remit of the Minister for Housing and Planning, provides the main regulatory framework for the private rental sector and prescribes the statutory rights and obligations of landlords and tenants.

The Central Bank published the revised CCMA in June 2013.  As part of the financial institutions' delivery of full implementation of the revised CCMA, the boards of directors of all mortgage lenders were required by the Central Bank to sign off that all of the provisions of the revised CCMA had been fully implemented and tested and that staff training had been completed.   Compliance with the CCMA will continue to be central to the Central Bank's work programme throughout 2014 and an inspection of mortgage lenders to test compliance with the revised CCMA will be conducted later this year. 

The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers in difficulty. If a borrower is not happy with the way that their lender is dealing with them or if they think the lender is not complying with the CCMA, the borrower can make a complaint to their lender. Under the CCMA, borrowers have the right to appeal to the lender's Appeals Board if they are not happy with the alternative repayment arrangement offered or where a lender declines to offer an alternative repayment arrangement or if they believe they have been wrongly classified as not co-operating.   If the borrower is not happy with the outcome of the appeal/complaint made to the lender they can refer the matter to the Financial Services Ombudsman.

The monthly mortgage restructures and arrears data published by my Department also provides an impetus for those MART banks to increase the pace of provision of mortgage restructures.  The latest publication, in respect of the end of March, shows that some progress has been made in putting permanent mortgage restructures in place.  For example, the total number of permanent restructures of principal dwelling houses mortgages has risen from around 51,000 in December to around 62,000 in March 2014.  In addition, the latest Central Bank quarterly mortgage arrears and restructures publication ()  shows that lenders now have over 92,000 PDH mortgage accounts categorised as restructured at the end of March.  The data published by my Department, as well as the Central Bank data, would appear to demonstrate some success by the lenders in addressing the accounts in arrears as well as measures to prevent borrowers from going into arrears.  However, increased engagement in this area by the financial institutions will be necessary to address the situation of those remaining householders facing difficulties in meeting their mortgage commitments.