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

118. To ask the Minister for Finance if the lending institutions can continue to be encouraged to accommodate borrowers who have made reasonable efforts to meet their mortgage or borrowing repayments in respect of loans, particularly those loans which were by today's standards unsustainable from the outset; if the lending institutions will refrain from repossessions until an amicable and reasonable solution can be found to meet the requirements of borrowers and lenders and that the acquisition of loan books by third parties would not frustrate these objectives; and if he will make a statement on the matter. [34274/16]

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

120. To ask the Minister for Finance the extent to which his Department can monitor the situation affecting those with mortgage arrears, with particular reference to the need to ensure that family homes are protected to the greatest extent possible and that borrowers who continue to make payments within their capacity are facilitated into the future; and if he will make a statement on the matter. [34276/16]

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

I propose to take Questions Nos. 118 and 120 together.

The Deputy will be aware from previous PQ responses that the Government attaches great importance to the resolution of mortgage arrears and wants to keep families in their homes and avoid repossessions in so far as possible and he will also be aware of the recent establishment of the Abhaile mortgage arrears resolution service to ensure that those either in mortgage arrears or at risk of going into mortgage arrears on their primary residence are able to access State-funded professional legal or financial advice on their resolution options. The Deputy will also know that the Code of Conduct on Mortgage Arrears (CCMA) sets out statutory requirements for mortgage lenders and credit servicing firms dealing with borrowers in or facing arrears on the mortgage loan secured by their primary residence.

The CCMA includes guidelines on how co-operating borrowers are to be treated before legal action can commence. It is important to also note that the commencement of the court process is not a signal that a repossession will occur it may often be the case that the process then prompts borrowers to re-engage with their bank and to find a solution. Often these cases are adjourned to allow both parties time to find a sustainable solution. Borrowers should also consider other options such as a Personal Insolvency Arrangement.

With respect to the question of loans that have been sold to third parties, the Deputy will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated entity. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes, such as the Consumer Protection Code and the Code of Conduct on Mortgage Arrears. The Act means that any purchasers of loans books are required either to become regulated themselves by the Central Bank or use a regulated credit servicing firm to service their loans.

The numbers in mortgage arrears have been steadily declining. Data released by the Central Bank on 13 September shows that to end-Q2 2016, the number of mortgage accounts in arrears for principal dwelling houses (PDH) has declined for the last twelve quarters. Some 120,614 PDH accounts were also classified as restructured. It is clear that where a borrower actively engages with their lender under the CCMA with a view to agreeing a sustainable arrangement to address their mortgage arrears, it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home.