Michael McGrath (Cork South Central, Fianna Fail)
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102. To ask the Minister for Finance the number of residential mortgages here that are classified as sub-prime; the number of sub-prime lenders currently operating in the market; the total value of sub-prime mortgages outstanding; the rate of arrears on these mortgages; the actions specific to the sub-prime sector which are being taken to address arrears; and if he will make a statement on the matter. [23848/16]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank has advised me that it is important to note that there is no such regulated category as "sub-prime lender".  However, Retail Credit Firms are authorised to provide credit, in the form of cash loans, directly to individuals (these firms are not licensed to accept deposits).  Some firms authorised in this category are mortgage lenders.  Retail Credit Firms have been subject to regulation by the Central Bank since 1 February 2008.  A register of all Retail Credit Firms is available on the Central Bank website at  www.registers.centralbank.ie/DownloadsPage.aspx.  In light of their activities, Retail Credit Firms are not subject to the same prudential supervisory regime as licensed credit institutions but are subject to the same Consumer Protection framework requirements, including the Central Bank's statutory Consumer Protection Code and the Code of Conduct on Mortgage Arrears ('CCMA').

The Central Bank's Residential Mortgage Arrears and Repossessions Statistics: Q1 2016, which can be viewed at www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2016q1_ie_mortgage_arrears_statistics.pdf ,  details figures on 'Mortgage Arrears Repossessions and Restructures of Non-Bank Entities' for both PDH and BTL properties.  This group of non-bank entities includes authorised retail credit firms, as well as entities holding mortgage loans that were previously on the balance sheet of Irish resident banks.  In Q1 2016 there were 14,443 PDH mortgage accounts in arrears for more than 90 days  held by non-bank entities, with an associated outstanding balance of almost €3.17bn, and associated arrears of  just over €0.7bn (23 per cent of total outstanding balance). During the same period there were 4,638 BTL mortgage accounts in arrears for more than 90 days held by non-bank entities, with an associated outstanding balance of €1.37bn and associated arrears of €0.45bn (33 per cent of total outstanding balance).

The CCMA sets out requirements for all mortgage lenders dealing with borrowers in arrears or pre-arrears on a mortgage loan which is secured by their  primary residence.  It 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 Central Bank engages with Retail Credit Firms in relation to their treatment of borrowers under the Mortgage Arrears Resolution Process (MARP), as provided for in the CCMA. The MARP sets out the steps which lenders must follow, e.g. communicate with the borrower, gather financial information, assess the borrowers circumstances and propose a resolution.

Finally, the Government is committed to working with the Central Bank to ensure that the Code continues to be relevant, fair and balanced in respect of the legitimate interests of debtors and creditors, all the while promoting the availability of sustainable solutions to address genuine mortgage difficulty. This will include the Central Bank conducting an assessment of existing sustainable restructuring solutions across all lenders and non-bank entities operating in Ireland.