Seán Fleming (Laois-Offaly, Fianna Fail)
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29. To ask the Minister for Finance if he has examined the success or otherwise of restructuring arrangements put in place for customers who fall into mortgage arrears to maximise long-term sustainability; and if he will make a statement on the matter. [41756/14]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, 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, the Central Bank is requiring the main lenders to work through their mortgages in arrears (both primary dwelling and buy to let mortgages) of more than 90 days and, where possible, to "propose" and "conclude" sustainable solutions with their borrowers in arrears.  The Central Bank has now set quarterly targets to the end of 2014 by which time the relevant banks will be required to "propose" sustainable solutions to 85% of customers over 90 days in mortgage arrears and for "concluded" solutions to reach 45%.

A sustainable solution has been clearly defined in the Central Bank's published MART document and the Central Bank has informed me that a range of sustainable solutions have been utilised by each of the lenders to date. These include but are not limited to the following:

- Term Extensions

- Split Mortgages

- Permanent Interest Rate Reductions

- Voluntary Surrender 

The Central Bank's latest 'Residential Mortgage Arrears and Repossessions Statistics' publication for the end of Quarter 2 2014 (), shows that the number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell for the fourth consecutive quarter and at the end of June 2014, 90,343 (11.8 per cent) primary dwelling mortgage accounts were more than 90 days in arrears, representing a decline of almost 3% over the quarter.  The publication also shows that 101,973 PDH accounts were categorised as restructured at end June, an increase of 10.3 per cent from the stock of restructured accounts at the end of March 2014.  Some 81.2 per cent restructured accounts were deemed to be meeting the terms of their arrangement, which is a good indicator of the sustainability of proposed solutions. In addition, almost 24,000 BTL accounts were categorised as restructured at the end of June, reflecting an increase of 3.3 per cent from the stock of restructured accounts reported at end-March 2014.

Separately from Central Bank quarterly reports, a monthly reporting regime on mortgage restructures and arrears for the six main banks covered by the Central Bank's MART process has been put in place by my Department.  The latest publication, with data to the end of August, shows an increase of almost 5% (3,800) permanent mortgage restructures since the end of July 2014. 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 mortgage arrears as well as measures to prevent borrowers from going into arrears.  The framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations.  Both my Department and the Central Bank will continue to keep the position under review and make any further adaptions to the overall resolution framework as may be considered appropriate.

In conclusion, the Central Bank continues to engage with all mortgage lenders in relation to lenders' mortgage arrears resolution strategies and approaches to dealing with borrowers in or facing arrears.  Early and effective engagement between borrowers and lenders is key to resolving the majority of cases of mortgage difficulty.  Where there is effective and meaningful engagement by all parties regarding a mortgage difficulty, the data shows that an increasing number of durable long term mortgage restructures can and are being put in place.