Brendan Griffin (Kerry, Fine Gael)
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131. To ask the Minister for Finance if he will intervene in cases in which a financial management company (details supplied) is refusing to restructure and engage with debtors with sustainable mortgages; and if he will make a statement on the matter. [49809/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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As Minister for Finance, I am unable to intervene in the commercial decision-making of any financial institution. I have also been advised by the Central Bank of Ireland that they cannot comment on any individual firm.

However, 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 regulated entities have appropriate arrears resolution strategies and operations in place.

The Code of Conduct on Mortgage Arrears (CCMA) forms part of the Central Bank’s Consumer Protection Framework. It is a statutory Code which provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms, 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. Banks, retail credit firms and credit servicing firms 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 given to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow.

The CCMA sets out the Mortgage Arrears Resolution Process, (MARP), a four-step process that regulated entities must follow:

Step 1:Communicate with borrower;

Step 2:Gather financial information;

Step 3:Assess the borrower’s circumstances; and

Step 4:Propose a resolution

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.At the end of the MARP process, regulated entities are required to provide a three-month notice period to allow co-operating borrowers time to consider their options, such as voluntary surrender or an arrangement under the Personal Solvency Act, before legal action can commence. The CCMA includes requirements that arrangements be sustainable and based on a full assessment of the individual circumstances of the borrower and that repossession be used only as a last resort.

Under the CCMA, a regulated entity may only commence legal proceedings for repossession where it has made every reasonable effort to agree an alternative repayment arrangement (ARA) with the borrowers and other clear requirements are met or the borrower has been classified as not co-operating.

This framework requires lenders to exhaust the options available from the suite of ARAs offered before taking action which may result in the borrower losing his/her home (whether by voluntary sale or repossession).

Sections 49 to 55 of the CCMA sets out the appeals process available to borrowers which includes the establishment of an Appeals Board by every lender to consider and determine appeals made by borrowers in relation to decisions made by lenders.

Finally, I published the Central Bank's review of the CCMA earlier this month and the key finding of the Report is that for borrowers who engage with the process, the CCMA is working effectively and as intended in the context of the sale of loans by regulated lenders.