Michael McGrath (Cork South Central, Fianna Fail)
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101. To ask the Minister for Finance the status of initiatives to protect the family home and to introduce additional long-term solutions for mortgage arrears cases; and if he will make a statement on the matter. [30700/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that responsibility for initiatives to protect the family home is spread across several Government Departments and therefore, I will confine my response to the issues that come under my direct responsibility.

Within the remit of the Central Bank’s responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers through a strong consumer protection framework and ensuring that lenders have appropriate arrears resolution strategies and operations in place. 

The Code of Conduct on Mortgage Arrears is a key part of the Central Bank’s Consumer Protection Framework in this regard.  Banks, retail credit firms and credit servicing firms servicing loans on behalf of unregulated loan owners are all required to comply with the CCMA.  The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. 

Last year my predecessor wrote to the Governor of the Central Bank to request that an assessment be undertaken of the range of available sustainable restructure solutions offered by banks and non-bank entities. The subsequent report is published on the Department of Finance website.  The assessment found a comprehensive range of available restructuring solutions being offered and delivered by both bank and non-bank entities and noted considerable progress in addressing mortgage arrears since the peak.  The Central Bank noted further that  there is strong evidence that both banks and non-banks look to exhaust available restructure options before moving to the legal process.  In addition, the Central Bank considered the range of restructures offered by banks to be broadly appropriate in balancing consumer protection imperatives, and maintaining a mortgage market for all borrowers, and a functioning banking system.

The Deputy will also be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 has been enacted to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm.  This legislation ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale. 

Latest Central Bank Residential Mortgage Arrears Data for Q1-2017 indicates that mortgages in arrears for more than 720 days continued to decline for the seventh consecutive quarter and there has been a decline of 7.9 per cent in this maturity cohort in the past year. Central Bank data also shows a decline in short-term  restructure arrangements and increases in longer-term arrangements such as split mortgages.    

This indicates that where borrowers actively engage with their lender under the CCMA, it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home.