Pearse Doherty (Donegal South West, Sinn Fein)
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39. To ask the Minister for Finance the number of mortgages here that are outside the legal protection of the Code of Conduct on Mortgage Arrears having been sold to unregulated entities. [41742/14]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law.  The CCMA applies to the mortgage lending activities of all regulated entities, except credit unions, operating in the State, including:

-A financial services provider authorised, registered or licensed by the Central Bank of Ireland; and

-A financial services provider authorised, registered or licensed in another EU or EEA Member State and which has provided, or is providing, mortgage lending activities in the State.

I am aware of the concerns of some borrowers about sale of the mortgage books to funds that are not covered by the CCMA.  The details of the numbers of mortgages sold are considered commercially sensitive by the financial institutions involved. However, information from company announcements in the public domain, would suggest that between 8,000 and 10,000 mortgages in total have been sold to unregulated entities in recent years.

The Deputy will be aware that the Government intends to bring forward legislation to ensure that, where a regulated financial entity sells its loan book to an unregulated entity, the protections afforded under the Central Bank codes will continue to apply. The Government has reiterated this commitment on several occasions.

In July and August of this year, my Department ran a public consultation seeking views on its proposed legislation to protect consumers whose loans are sold to unregulated entities.  The Department of Finance received 19 submissions from a range of respondents from the financial services industry, consumer groups, public representatives and individuals and other stakeholders. These have been published on the Department's website at .  Officials in my Department have carefully considered the submissions and are working with the Office of the Attorney General to progress this legislation. It is anticipated that it will be published by the end of this year

The Central Bank has informed me that it has communicated to firms its preference that the outcome of any sale of mortgage books by regulated entities would ensure continuity of borrower protections under the relevant Codes and also that the purchaser would have relevant policies and procedures, systems and control checks to appropriately manage a mortgage loan book.  The reality is that it is in the best interests of unregulated firms that acquire loans to have the residential mortgage books serviced in compliance with the CCMA, as following the CCMA is in the ultimate best interests of both their business and their customers.