Tom Neville (Limerick County, Fine Gael)
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213. To ask the Minister for Finance if a person can volunteer their house for sale if they are in negative equity and have a bank write off the debt; and if he will make a statement on the matter. [55176/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I assume from the question asked that the person in question is in arrears.  The Central Bank has informed me that 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 (CCMA) is a key part of the Central Bank’s Consumer Protection Framework in this regard.  It is a statutory Code first introduced by the Central Bank in February 2009, with the current CCMA becoming effective from 1 July 2013.   The CCMA provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms with each borrower by reference to that borrower’s individual circumstances, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner by reference to that borrower’s individual circumstances.

Each regulated entity must consider the borrower’s situation in the context of the solutions they provide, which may differ from firm to firm.  The CCMA does not prescribe the solution which must be offered.  Rather, the CCMA includes requirements to ensure that any alternative repayment arrangement agreed between a lender and borrower is appropriate and sustainable and based on a full assessment of the individual circumstances of that borrower.

If a lender does not offer a borrower an alternative repayment arrangement, the lender must provide the reasons to the borrower and inform the borrower of the other options available and the implications of each option for the borrower, which may include voluntary surrender. Similarly, if a borrower is not willing to enter into an alternative repayment arrangement offered by the lender, the lender must also inform the borrower of other options available to the borrower, such as voluntary surrender, and the implications of these for the borrower and the borrower’s mortgage loan account.

However, as outlined above, the CCMA does not prescribe the solution which must be offered.  The decision on a voluntary sale and whether to write off any residual debt is a commercial decision for the lender.