Bernard Durkan (Kildare North, Fine Gael)
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75. To ask the Minister for Finance whether consideration might be given to a change in the way investment funds interact with consumers with particular reference to those funds who have bought impaired mortgages at a lower than face value rate, but who continue to exert pressure on the borrower for the full face value of the loan including arrears and interest; if consideration might be given to settlement nearest to price they bought the loan for notwithstanding moral hazard; and if he will make a statement on the matter. [46028/24]

Jack Chambers (Dublin West, Fianna Fail)
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There is a strong consumer protection framework in place in Ireland in relation to the operation of mortgage credit agreements entered into by consumers. All Central Bank regulated mortgage entities, including those entities servicing mortgage agreements or who hold the legal title to the rights of the mortgagor, are required to comply with this framework.

The Central Bank Code of Conduct on Mortgage Arrears 2013 (CCMA) is a key component of this regulatory framework. The CCMA applies where a borrower is in or facing arrears on a mortgage which is secured on a primary residence. Its primary objective is to ensure that regulated entities have fair and transparent processes in place for dealing with such borrowers. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits and all cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations.

In order to determine which options for an alternative repayment arrangement (ARA) are viable in a particular situation, each regulated entity must explore all of the ARA options offered by that entity. The CCMA provides that any ARAs offered by a regulated entity should be appropriate and sustainable and be based on a full assessment of the individual circumstances of the borrower. It should also be noted that the CCMA provides that each entity must have an appeals process in relation to a decision under the CCMA, including in circumstances where a regulated entity declines to offer an ARA or where a borrower is not willing to enter into the ARA offered by a regulated entity. Such an appeal must be considered by an Appeals Board that must be comprised of three of the entity’s senior personnel who have not been involved in the borrower’s case previously.

Furthermore, the regulated entity must also inform the borrower of his/her right to refer the matter to the Financial Services and Pensions Ombudsman.

However, the regulatory framework does not proscribe that a particular ARA or credit agreement modification should be provided in a particular situation. That is a matter which will fall for consideration in the context of the individual engagement between the borrower and the regulated entity under the CCMA’s mortgage arrears resolution process, or the consumer protection framework more generally, and I do not have a role in such matters.

Also, in circumstances where the initial lender assigns its benefits and rights under a credit agreement to another entity, the consideration paid for that assignment is a commercial matter for the relevant entities. However, the new entity which acquires the contractual rights and benefits of the creditor will do so based on the terms of the existing loan agreement and the borrower’s obligations and rights under the credit agreement will not change.

As the Deputy will know, there are also a number of public initiatives to assist people who are in mortgage or other debt difficulty. The Abhaile service which is made up of the Insolvency Service of Ireland (ISI), the Legal Aid Board, the Money Advice and Budgeting Service (MABS) and the Citizens Information Board provides free financial advice, and where appropriate also, legal advice to people experiencing difficulty with their mortgage.

This service can also provide advice on the insolvency options which may available to borrowers, including the possibility of a Personal Insolvency Arrangement in relation to an unsustainable secured debt.

I would encourage any person who is experiencing difficulty with their debt situation to contact MABS for advice and assistance.