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Government Strengthens Framework to Support Mortgage Holders in Arrears


Wednesday 13 May - The Government has agreed a number of new measures to support mortgage holders who are in arrears. Building on action already taken, the measures aim to increase the supports available to people in arrears and to increase the numbers of people availing of them.

In a major reform of the Personal Insolvency framework, the Government has agreed to give Courts the power to review and, where appropriate, to approve insolvency deals that have been rejected by banks. The Government will legislate to give effect to this change before the Summer recess.

This is expected to see more cases processed to a successful outcome through the Personal Insolvency framework. The process seeks to ensure that fair and sustainable deals are upheld for struggling borrowers willing to work their way out of difficulties with a view to keeping their family home.

Court rules and procedures will also be streamlined to guide more cases towards the Insolvency Service, building on existing measures to allow cases to be adjourned so that a defendant can engage with a Personal Insolvency Practitioner, and to assist people who are unfamiliar with Court rules and proceedings.

A number of other measures have been agreed.

The Mortgage to Rent scheme will be expanded, including in particular by increasing the property value thresholds that apply. A number of other flexibilities will also be introduced, making the scheme more accessible.

The Government has also agreed that the Money Advice and Budgeting Service (MABS) will play a greater role in offering information, advice and assistance to borrowers in arrears. Additional services to provide assistance in identifying the best options, completing financial statements and considering proposed solutions will be rolled out by MABS offices on a phased basis, following a process of engagement with the Citizens Information Board and MABS.

This will ensure that borrowers have access to information on the range of supports and options available, advice on the ones most suited to their needs, and assistance in pursuing such options, where necessary. MABS will be working closely with the Insolvency Service of Ireland (ISI).

Speaking after today’s Government meeting, the Minister for Finance, Michael Noonan, said:

“The Government is committed to helping people in arrears to reach sustainable solutions and engagement between lenders and mortgage holders has resulted in 115,000 solutions.

“The major reforms agreed at today’s Cabinet meeting are designed to help more people to access the supports, options and solutions available and, in particular to support mortgage holders in long term arrears. I am confident that the new powers available to the Courts will help to underpin the credibility of the Insolvency Service and encourage more deals to be reached”.

Commenting on the new Insolvency measure, the Minister for Justice and Equality, Frances Fitzgerald, said:

“ The new provision for independent review by the courts is an important reform to protect distressed mortgage-holders from any unfair lack of cooperation from their banks when it comes to seeking to agree a personal insolvency solution.

“This reform will provide a better balance between the interest of banks and those facing unsustainable mortgages.

“It will ensure that personal insolvency legislation can work as it was intended to.

I have instructed my officials to finalise the legislative provisions required so that these changes can be brought forward as amendments to the Personal Insolvency Amendment Bill 2014 which is currently awaiting Report Stage in the Dáil.”

Announcing the changes to the Mortgage-to-rent scheme, the Minister for the Environment, Community and Local Government said:

“I welcome all of these measures that will assist borrowers in distressed situations.

“Specifically on Mortgage-to-Rent, these new measures are designed to improve access to the scheme. The new thresholds make it more flexible and accessible. While they represent an important development, the mortgage-to-rent scheme is designed for those who are willing to give up ownership of their home and convert it to social housing.

“The priority of Government would be that people retain full ownership of their homes. However, for those who have an unsustainable mortgage, it will provide a vital solution or option that allows people to dispose of their mortgage while still remaining in their own homes. I also look forward to seeing the bankruptcy legislation as proposed by Deputy Willie Penrose progressed to the Finance Committee in a timely fashion."


For more information:

Please contact:

· Brendan Loughnane, Department of Finance, 086 388 7855

· Press Office, Department of Justice & Equality, 01 602 8328

· Jim McGrath, Department of Environment, Community & Local Government, 087 255 8866

There are also some infographics available on Merrion Street.

ISI and MABS are also available for further comment.

Key statistics regarding mortgage arrears

According to the latest statistics from the Central Bank on Mortgage Arrears for Quarter 4 2014:

· 758,988 private residential mortgage accounts

· 84.5% of primary home mortgages are not in arrears

· 110,336 of primary home mortgages are 1 day past due, of which 37,778 are 2 years in arrears

· To date, 114,674 accounts have been restructured

For more information, see:


Mortgage Arrears measures introduced to date by this Government 

This revised package of measures builds on the work already introduced by this Government since they took office, which includes:

· Overhauled bankruptcy rules in Ireland

· Set clear targets for the banks to offer distressed borrowers sustainable solutions

· Introduced the mortgage-to-rent

· Established the Insolvency Service of Ireland

· Revised the banks' Code of Conduct to ensure mortgage arrears cases are handled fairly

· Set up a new helpline for distressed borrowers

· Created a new website for distressed borrowers, Set up www.keepingyourhome.ie

Key elements of the revised package on mortgage arrears

Taking more cases out of Courts/Strengthening ISI/Supporting borrowers who turn up in Court

· Sustained ISI awareness campaign.

· Court officials to steer borrowers/defendants proactively towards ISI.

· ‘Examinership’ approach to enable Courts to overturn vetoed PIA subject to certain tests.

· Simple guidance materials to support borrowers through Court process.

· Enhanced training for PIPs and strengthened power for ISI to audit/review PIPs.

· ISI Consultative Forum to keep operational effectiveness under review.

· More systematic/automatic use by Courts of possibility to adjourn case to consult PIP.

Keeping People in Home Whenever Possible/Options for Loss of Ownership

· Additional funding to be made available to support expanded Mortgage to Rent. Improvements to include:

o Valuation thresholds to be increased and thresholds to be reviewed regularly
o Greater flexibility on eligibility, including size
o Social housing need assessed without delay for borrower that has completed MARP process

Supporting Early Engagement

· MABS to be ‘one-stop-shop’ point of information and guidance
· Sustained public awareness campaign - common/coordinated approach across Departments/agencies and lenders
· We will ensure that borrowers are in a position to access independent expert advice, where needed, in completing financial statement, supported by

· Clarity/simplicity of key documents improved, including those issued by banks