Written answers

Wednesday, 20 July 2016

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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102. To ask the Minister for Finance the extent to which his Department continues to monitor the manner in which the various banks continue to accommodate customers who have found themselves in difficulty during the past number of years with particular reference to the need to ensure a positive accommodation; and if he will make a statement on the matter. [23085/16]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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105. To ask the Minister for Finance the extent to which the level of mortgages arrears continues to be managed in a way that is accommodating to the circumstances of the borrower; and if he will make a statement on the matter. [23088/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 102 and 105 together.

The Deputy will already be aware that the Government attaches great importance to addressing the issue of mortgage arrears and wants to keep families in their homes and avoid repossessions insofar as possible and in that context it will today publish the Housing Action Plan setting out the implementation strategy for the Programme for a Partnership Government commitments in respect of protecting home ownership.

I am informed by the Central Bank that as part of on-going supervision, the Central Bank, working in conjunction with the European Cental Bank (ECB) as part of the Single Supervisory Mechanism (SSM), continues to challenge the banks on their strategies, management, measurement and reporting of the resolution and restructuring of all non-performing loans (NPLs), including mortgages. In April 2015 the Central Bank wrote to each bank setting out supervisory requirements with regard to mortgage arrears resolution that conform to their published Internal Guidelines on Sustainable Mortgage Arrears Solutions. 

In relation to homeowners in financial difficulties, the Code of Conduct on Mortgage Arrears (CCMA), a statutory code under Section 117 of the Central Bank Act 1989, is designed to provide appropriate and effective consumer protection measures and to ensure that borrowers are treated in a fair and transparent manner. The CCMA applies to all regulated mortgage lenders operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence, including any mortgage lending activities outsourced by these lenders. Lenders are required to comply with all aspects of the CCMA and non-compliance with the CCMA is enforceable against regulated entities by the Central Bank.

In June 2015, the Central Bank published the outcome of a themed inspection of lenders' compliance with the CCMA. As part of this theme seven lenders were inspected under 4 keys area. The Themed review found that while all of the lenders had implemented frameworks as required by the CCMA, weaknesses of varying degrees were identified across a number of lenders as well as a number of good practices. Formal supervisory requirements, with specific timelines for remediation, have been imposed on those lenders where risks to borrowers were identified and all lenders that were subject to the CCMA themed inspection have provided responses to the issues raised with them. The Central Bank of Ireland continues to engage with these lenders as part of their on-going supervisory engagement to ensure compliance with the CCMA.

The CCMA requires all regulated lenders to wait at least eight months from the date the arrears arose, before legal action can commence against a co-operating borrower. Separately, regardless of how long it takes the lender to assess a case, and provided that the borrower is co-operating, the lender must give three months' notice to the borrower before they can commence legal proceedings where the lender does not offer an alternative repayment arrangement or the borrower does not accept an alternative repayment arrangement offered by the lender. This gives co-operating borrowers time to consider other options such as a Personal Insolvency Arrangement.

In addition my Department continues to monitor and publishes Mortgage Restructures data on a monthly basis that covers mortgage accounts for the six main lenders. The figures in the latest publication for May 2016 (published on 14 July) show that Primary Dwelling Home (PDH) mortgage accounts in arrears continue to decline and now stand at 65,458 representing an improvement of 19% compared to May 2015.

In conclusion, I must reiterate that active engagement by indebted borrowers with their lender is key to achieving a sustainable resolution, and I would urge borrowers in arrears, who have not already done so, to take that first step by contacting their lender directly or to contact the Dedicated Mortgage Advisory Service at MABS for an independent assessment of their situation and advice on available resolution options.   

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