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 Header Item Mortgage Arrears Proposals (Continued)
 Header Item Visit of US Senator
 Header Item Ceisteanna - Questions (Resumed)
 Header Item Priority Questions (Resumed)
 Header Item Bank Codes of Conduct

Tuesday, 2 July 2013

Dáil Éireann Debate
Vol. 809 No. 2

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Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath We need the breakdown in aggregate form of the 25,000 sustainable solution offers the Minister said have been made. Under the definition provided in the mortgage arrears resolution targets it is up to the bank to make the call as to what that solution is but it can be interest only. That is fine for those in short-term financial difficulty but it can mean putting somebody into insolvency or handing back the keys to the House. They might be sustainable solutions in one person's definition but in another person's definition that could mean the family home is gone. We need to have the data. Looking at the latest figures to the end of March, the reality is that of the more innovative long-term solutions such as split mortgage or a permanent interest rate reduction, less than 400 have been put through and in the context of 142,000 people actually in arrears with their family home, that is a drop in the ocean.

Progress in this area must be accelerated. We need more data. I hope the Minister's plan works but I have my doubts. I would rather that an independent office had the final say in determining what is a fair solution to a person's mortgage difficulty but the Minister has gone down a certain road. I hope it works but we need the data.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan I have some statistics that may be of help to the Deputy. At the end of March 2013, a total stock of 79,689 private dwelling house mortgage accounts were categorised as restructured. That is an increase of 1.8% on the end of December 2012. Of the restructured accounts, 53% are not in arrears. New data collected this quarter, that is, quarter 1 of 2013, indicated that 76% of restructured accounts were deemed to be meeting the terms of their agreement. A total of 24,706 new structure arrangements were agreed during the first quarter of the year. A total of 33.1% of the restructured accounts are on interest only arrangements, a fall of four percentage points on the end of December position, while a further 21.7% are on payments that are greater than interest only. Together, interest only arrangements and reduced payment arrangements account for approximately 55% of all restructured types. That was 59% at the end of December. A total of 144 accounts are in split mortgage arrangements, an increase of 92 cases on quarter 4, while 241 accounts have availed of permanent interest rate reduction, an increase of 17 cases. We have data and I will try, when we are making various statements, to give as much data as I can.

Visit of US Senator

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Before proceeding to the next question, on my own behalf and on behalf of the Members I welcome United States Senator Margaret Craven, from the state of Maine, to the House. I hope she has a very enjoyable visit. Céad míle fáilte. A hundred thousand welcomes.

Ceisteanna - Questions (Resumed)

Priority Questions (Resumed)

Bank Codes of Conduct

 66. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the reason, at a time of still increasing mortgage arrears, he is allowing banks, through a revised code of conduct on mortgage arrears, to deal more aggressively with struggling home owners including by removing the 12 month moratorium, lifting the limit of three contacts per month and supporting the reversal of the Dunne judgment.  [32192/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank has now concluded a review of the code of conduct on mortgage arrears, CCMA, following a public consultation process, with in excess of 230 submissions received. The revised CCMA was published on 27 June 2013 and came into effect on 1 July 2013. The submissions made, as well as a feedback document outlining the Central Bank's response to some of the main issues raised, have been published on the Central Bank's website, www.central bank.ie.

  The CCMA provides an integrated and cohesive package of consumer protection measures for borrowers facing or in mortgage arrears. It reflects the current mortgage arrears situation and seeks to deliver on the following principles: to ensure appropriate resolution of each borrower's arrears situation; ensure that lenders deal with borrowers in a fair and transparent manner; support and facilitate meaningful engagement between lenders and borrowers; and ensure borrower awareness of the benefits of co-operating with their lender, and the consequences of not co-operating. With regard to the moratorium, to clarify, the 12 month moratorium applied from day 31 after arrears first arose and did not take into account any time taken by the lender to gather information from the borrower, complete an assessment or make an offer. The revised CCMA requires a lender to wait at least eight months from the date the arrears arose before legal action can commence against a co-operating borrower.

  Separately, regardless of how long it takes the lender to assess a case, and provided that the borrower is co-operating, the lender must give three months' notice to the borrower before it can commence legal proceedings where the lender does not offer an alternative repayment arrangement or the borrower does not accept an alternative repayment arrangement offered by the lender.


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