Written answers

Wednesday, 1 April 2015

Department of Finance

Home Repossession

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

56. To ask the Minister for Finance the steps required to prevent large scale repossessions of family homes where the borrowers are willing to make or continue to make payments within their means and circumstances; if particular attention has been drawn to unregulated third parties who have acquired the loan books; and if he will make a statement on the matter. [13592/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Government's response to mortgage arrears has been multi-faceted. 

The Central Bank has undertaken capital assessment reviews, stress tests, distressed credit operation reviews, balance sheet assessment exercises, a range of on-site inspections and throughout this period there has been on-going and intensive supervisory engagement with the banks. 

The Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residence. 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.  The CCMA states that a lender may only commence legal proceedings for repossession where the lender has made every reasonable effort to agree an alternative repayment arrangement under the CCMA with the borrower or his/her nominated representative and the specific timeframes set out in the CCMA have been adhered to or the borrower has been classified as not co-operating.  The CCMA does however recognise that, having considered the full individual circumstances of the borrower, in certain cases the only available option may be the sale of the property.  In some cases this may involve voluntary surrender or legal action for repossession.

When borrowers engage with their lender it is usually possible to agree a sustainable restructure to address and resolve their difficulties.  Data released by the Central Bank shows that almost 115,000 mortgage accounts were classified as re-structured at the end of 2014.  This represented an increase of about 30,000 accounts over the course of 2014.

In relation to situation where unregulated third parties have acquired loan books the Deputy should note that the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 was published in January and second stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation.  It is my intention to ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same protections as they had prior to the sale. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill at Committee Stage.  The legislation is not retrospective. However, it will apply to all loans as defined, regardless of when they were acquired, thus capturing loan books that have already been sold. A similar approach was used in 2013 in relation to debt management firms.

Comments

No comments

Log in or join to post a public comment.