Remarks by the Taoiseach, Mr Brian Cowen TD, Interim Report of the Mortgage Arrears and Personal Debt Review Group, 6th July, 2010

I want to welcome the Interim Report of the Mortgage Arrears and Personal Debt Review Group which was submitted to Government this morning

I know it reflects a lot of work and consultation with different parties over the last few months

The Renewed Programme for Government sets out the Government's objective to introduce new measures to help families that are having difficulties with their home mortgage payments and to examine ways of expanding our own mortgage-support measures.

We fully recognise that the rise in unemployment and the fall in house prices means some people are in serious difficulty with their mortgages and we need to minimise the economic and social consequences from the problem of mortgage arrears

The Interim Report of the Group Mortgage Arrears highlights some important facts. 

Firstly, the level of repossessions in Ireland remains very low. This reflects the measures the Government put in place over the last two years

Secondly, there are over 30,000 mortgages in arrears for 90 days or more, while it is estimated that a similar number may have entered into forbearance arrangements with their lenders

While this is only a small percentage of total mortgages, it does represent a real economic and social problem facing many families

In their Interim Report, the Group have come up with a set of practical recommendations to help people in difficulty

Their report complements the Review of the Mortgage Interest Supplement Scheme which is also being published today

The Group have made 41 recommendations to help borrowers in difficulty through a comprehensive Mortgage Arrears Resolution Process

It aims to help borrowers and lenders come to a solution which, where possible, will allow the borrower remain in their homes

Repossessions should be minimised, but the Group recognises that in some cases, voluntary surrender may be the best option for both borrower and lender

All lenders will be required to put in place a Mortgage Arrears Resolution Process. This will ensure consistent treatment of lenders in difficulty

Lenders will not be allowed apply penalty interest or arrears charges to borrowers who are taking part in this Process

There will be much greater emphasis on communication with borrowers at all stages

There will be standardised documentation and a consistent approach to borrowers in difficulty

There will continue to be a strong emphasis on forbearance to give borrowers the opportunity and time to resolve their difficulties

The changes to the Mortgage Interest Supplement Scheme will fit into this new approach

Most of these recommendations can be implemented in the short term and the Financial Regulator has agreed, where possible, to implement the recommendations without delay

He will start consultation immediately on necessary changes to the Code of Conduct on Mortgage Arrears

The Group has also identified a number of important aspects of the Mortgage Arrears Resolution Process where further work is required

This work is already underway and they are due to report back by end-September

This issue is of huge economic, social and psychological importance as we move into the next phase of economic recovery

The Group has provided us with a lot or practical, deliverable and balanced recommendations which help us manage through a problem affecting many families.

Copies of these reports are now available on the web sites of the Departments of Finance and Social Protection

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