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Mortgage Arrears Proposals: Motion (Resumed) [Private Members]

Vote from 10/07/2013

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The following motion was moved by Deputy Michael McGrath on Tuesday, 9 July 2013:
“That Dáil Éireann:
notes:

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Background information

The following motion was moved by Deputy Michael McGrath on Tuesday, 9 July 2013:
“That Dáil Éireann:
notes:
— the latest mortgage arrears statistics published by the Central Bank showing a further increase in the number of arrears cases with 142,118 family home mortgages in arrears at 31st March, 2013;
— that, as a result of various initiatives by Government and the Central Bank, the balance of power has shifted firmly in favour of the banks and against the distressed mortgage holder;
— the recent publication by the Central Bank of the Revised Code of Conduct on Mortgage Arrears;
— the imminent enactment of the Land and Conveyancing Law Reform Bill 2013 which, inter alia, nullifies the Dunne judgment;
— the number of family home mortgages in arrears of greater than 12 months has increased significantly and now stands at over 54,000;
— comments from senior officials in the Department of Finance and the Central Bank predicting a significant increase in the level of home repossessions;
— that the banks hold an effective veto on any proposed arrangement involving the mortgage under the new Insolvency Service; and
— that under the Mortgage Arrears Resolution Targets:
— the banks are not yet required to achieve any targets for reaching agreement with borrowers;
— the banks decide on the nature of the sustainable solution to be offered to the borrower; and
— the sustainable solution can involve interest only, putting the borrower into the insolvency process or the repossession of the property by way of a Court Order;
recognises:
— the widespread concern among distressed borrowers of imminent legal action by banks to initiate repossession proceedings; and
— the evidence from advocacy groups and from direct contact with mortgage hold- ers that banks are now taking a more hard line approach with those in mortgage arrears;
calls for the Code of Conduct on Mortgage Arrears to be revised to enshrine the fol- lowing provisions:
— a clear definition of what constitutes an unsustainable mortgage following a pro- cess involving representatives of both borrowers and lenders;
— an entitlement to a minimum protected level of income for a borrower entering an arrangement with their bank;
— reinstatement of a maximum number of successful contacts that a bank is allowed
to have with a mortgage holder in any calendar month;
— in recognition of the difficulty with placing a value on a tracker mortgage, where a borrower is faced with an offer which involves surrendering their tracker mortgage, a requirement that a third party verify if the offer from the bank is in their best interests;
— reinstatement of the 12 month moratorium on repossession proceedings for mort- gage holders who have entered the Mortgage Arrears Resolution Process;
— the Central Bank to require that banks record all calls with borrowers and that these can be stored so that Central Bank staff can access them randomly to check them for any incidents of harassment or following a specific complaint;
— an obligation on a bank seeking an order for repossession to first obtain written confirmation from the Central Bank that it has exhausted every other course of action available to keep a family in their home; and
— an obligation on any bank seeking to classify a mortgage holder as uncooperative and moving for immediate repossession to obtain confirmation from the Central Bank that they can be properly classified as uncooperative; and
further calls for regulation of debt collection agencies, in particular, where they are engaged by banks in respect of customers in mortgage arrears.”

Debate resumed on amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
“- acknowledges that this Government inherited a severe mortgage arrears crisis;
- recognises that the Government has already taken a number of significant steps to address the mortgage arrears problem;
- in particular, acknowledges that the present Government established the Interde- partmental Mortgage Arrears Working Group and subsequently published the group’s report in October 2011;
- notes that the group’s report indicated the mortgage arrears problem is complex and that a range of measures, such as personal insolvency reform, the development of mortgage-to-rent, the provision of mortgage advice, direct engagement by banks and the development of sustainable options by banks for their customers who are experiencing mortgage difficulty, need to be advanced to address the problem;
- recognises that the Government has moved to implement the main recommenda- tions of the Interdepartmental Mortgage Arrears Working Group report; and that a spe- cial Government committee, chaired by an Taoiseach, is overseeing the implementation of the measures across Government;
- acknowledges that significant progress has now been made, including the fact that:
— the Personal Insolvency Act 2012 was signed into law on 26th December, 2012;
— the Insolvency Service of Ireland was formally established on 1st March, 2013;
— the Mortgage-to-Rent Scheme is now available across the country; and
— a Mortgage Advisory Function is now in place;
- encourages the Government and other authorities to continue this work, in par- ticular to enhance action by mortgage lenders to appropriately address unsustainable mortgage loans;
- notes that the Government has taken steps to address a lacuna in the law arising from the High Court decision in July 2011 which created uncertainty in the law relating to the exercise by lending institutions of their repossession rights;
- notes the targets set by the Central Bank requiring the main mortgage lenders to offer durable solutions to mortgage holders over 90 days in arrears;
- notes that the latest Central Bank mortgage arrears and repossession statistics for end March 2013 show that there was a total stock of 79,689 principal dwelling house mortgage accounts classified as restructured and that 76 per cent of these are deemed to be meeting the terms of their restructured agreement;
- acknowledges the Central Bank’s initiative of the Framework for a Pilot Approach to the Co-ordinated Resolution of Multiple Debts owed by a Distressed Borrower;
- notes the revision of the Central Bank’s Code of Conduct on Mortgage Arrears; and
- recognises that there are provisions in the Central Bank’s Consumer Protection Code for Licensed Moneylenders which provide protections to consumers in relation to the debt collection activities of licensed moneylenders.”
- (Minister for Finance)

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