Eugene Murphy (Roscommon-Galway, Fianna Fail)
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94. To ask the Minister for Finance the guidelines that banks use when calculating the ability to pay of a person in mortgage arrears; and if he will make a statement on the matter. [12555/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I refer the Deputy to the Code of Conduct on Mortgage Arrears (CCMA).

The completion of affordability assessments is a key step in the Mortgage Arrears Resolution Process set out in the CCMA (Step 3 - Assessment). In this regard regulated entities must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including:

a) the personal circumstances of the borrower;

b) the overall indebtedness of the borrower;

c) the information provided in the standard financial statement;

d) the borrower’s current repayment capacity; and

e) the borrower’s previous repayment history. (See Provision 37 of the CCMA).

While the CCMA obliges lenders to explore all of the options for alternative repayment arrangements (ARA) offered by that lender under step 4 of the MARP, it does not oblige lenders to offer and apply a particular set of options nor does it approve the specific options that a lender does offer. The Central Bank has focused on providing a fair and consistent process for the borrower through the CCMA, the MART audits and against defined Sustainability Guidelines. The Central Bank of Ireland published sustainability guidelines, published in September 2013 and subsequently updated them in June 2014. The guidelines are available at ).

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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95. To ask the Minister for Finance the reason a person's minimum required pension contributions are not taken into account as an expense when calculating the ability to pay of person in mortgage arrears; and if he will make a statement on the matter. [12556/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I refer the Deputy to the relevant parts of Code of Conduct on Mortgage Arrears (CCMA) and the Standard Financial Statement (SFS):

The Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) applies to all regulated mortgage lenders and credit servicing firms operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence.

The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent way by their lender and that long term resolution is sought by lenders with each of their borrowers. It sets out a process, called the Mortgage Arrears Resolution Process (MARP).

The MARP is a four-step process which lenders must follow:

Step 1: Communicate with the borrower

Step 2: Gather financial information

Step 3: Assess the borrower’s circumstances

Step 4: Propose a resolution

As part of step 2 of MARP, a lender must use the prescribed standard financial statement (the SFS) to obtain financial information from a borrower in arrears or pre-arrears, including information in relation to net monthly salary (in section B) and pension contribution (in section C). The lender must provide the borrower with the SFS at the earliest possible opportunity and offer to assist the borrower with completing the SFS.

The completion of affordability assessments is a key step in the MARP (MARP) (Step 3). In this regard a lender must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including, inter alia, the information provided in the SFS.