[FONT="]I have summarised the Executive Summary over three posts[/FONT][FONT="]
[/FONT]
[FONT="]The Expert Group on Mortgage Arrears and Personal Debt was established by the[/FONT]
[FONT="]Government in February 2010 and was tasked with making recommendations to the[/FONT]
[FONT="]Minister for Finance on options for improving the current situation for families with[/FONT]
[FONT="]mortgage arrears on their principal private residence and with personal debt.[/FONT]
[FONT="]The Group published an Interim Report in July 2010 and its recommendations were[/FONT]
[FONT="]accepted by the Government. These recommendations have formed a very important[/FONT]
[FONT="]part of the overall work of the Group. Many of these recommendations are currently[/FONT]
[FONT="]being implemented. This includes publication by the Central Bank of a consultation[/FONT]
[FONT="]paper to amend the statutory Code of Conduct on Mortgage Arrears (CCMA).[/FONT]
[FONT="]In the final phase of its work, the Group focussed on the three key areas of advanced[/FONT]
[FONT="]forbearance, social housing and personal debt. The Group actively sought the views of[/FONT]
[FONT="]practitioners in these areas to add to its understanding of both complex technical[/FONT]
[FONT="]matters and general issues of policy.[/FONT]
[FONT="]The Group reviewed international practices in regard to all of the main issues which it[/FONT]
[FONT="]considered. A critical part of the Group’s work was to evaluate the potential[/FONT]
[FONT="]applicability of solutions, which are in operation elsewhere, to an Irish context.[/FONT]
[FONT="]This Report is based on the current level of information available. However, the[/FONT]
[FONT="]Group is conscious of the range of factors which may impact on future developments[/FONT]
[FONT="]in the economy. Accordingly, we suggest that arrangements be made for ongoing[/FONT]
[FONT="]monitoring of the situation to ensure that policy responses continue to be relevant and[/FONT]
[FONT="]appropriate.[/FONT]
[FONT="]Key Findings[/FONT]
[FONT="]The key findings are set out below and described more fully in the main body of the[/FONT]
[FONT="]report.[/FONT]
[FONT="]Mortgage arrears data from the Central Bank at the end of June 2010 show[/FONT]
[FONT="]that 36,438 residential mortgage accounts, representing 4.6% of the total[/FONT]
[FONT="]number of accounts, are in arrears for over 90 days. This compares with 3.3%[/FONT]
[FONT="]at the end of September 2009.[/FONT]
[FONT="]The Group concluded that arrears levels will persist for some time and may get[/FONT]
[FONT="]worse before they get better. Forthcoming data from the Central Bank is[/FONT]
[FONT="]expected to show that 5% of all mortgage accounts are in arrears for over 90[/FONT]
[FONT="]days. This has informed the Group’s thinking in relation to proposals for[/FONT]
[FONT="]advanced forbearance.[/FONT]
[FONT="]The Central Bank, as an input into the work of the Group, conducted a survey[/FONT]
[FONT="]of lenders in regard to the level and type of loan rescheduling. It is estimated[/FONT]
[FONT="]from the survey that the number of rescheduled mortgage accounts is up to[/FONT]
[FONT="]45,000. There is an overlap of 20- 25% between rescheduled mortgages and[/FONT]
[FONT="]arrears cases, giving an estimated total of 70,000 who are either in arrears or[/FONT]
[FONT="]have rescheduled.[/FONT]
[FONT="]The Group estimates, based on the Central Bank’s quarterly data on mortgage[/FONT]
[FONT="]arrears and the lenders survey, that around 90% of mortgage accounts are[/FONT]
[FONT="]being repaid in accordance with the contract. Two thirds of rescheduled[/FONT]
[FONT="]mortgage accounts are paying at least full interest.[/FONT]
[FONT="]The Group notes that repossession levels in [/FONT][FONT="]Ireland[/FONT][FONT="] remain substantially lower[/FONT]
[FONT="]than those experienced in the [/FONT][FONT="]UK[/FONT][FONT="] and found that lender forbearance is working[/FONT]
[FONT="]and is having a beneficial impact.[/FONT]
[FONT="]The Group notes that the Exchequer is already providing significant assistance[/FONT]
[FONT="]through the Mortgage Interest Supplement (MIS) scheme to borrowers on low[/FONT]
[FONT="]incomes who are in difficulty. The Group notes that, at present, MIS assists[/FONT]
[FONT="]almost 17,800 borrowers.[/FONT]
[FONT="]The Group, during the period of its research, could not identify any[/FONT]
[FONT="]arrangements internationally that could be characterised as mortgage debt[/FONT]
[FONT="]forgiveness schemes, with the exception of parts of the [/FONT][FONT="]US[/FONT][FONT="] where non-recourse[/FONT]
[FONT="]mortgage lending applies.[/FONT]
[FONT="]The Group noted that Mortgage to Rent Schemes operating in the [/FONT][FONT="]UK[/FONT][FONT="] are[/FONT]
[FONT="]based on very different funding models than that which would pertain in[/FONT]
[FONT="]Ireland. The Group also noted that lenders who participated in leasing type[/FONT]
[FONT="]arrangements with local authorities, in respect of properties held under[/FONT]
[FONT="]unsustainable mortgages, would face adverse capital implications.[/FONT]
[FONT="]The Group noted that the development of personal insolvency law in many[/FONT]
[FONT="]jurisdictions would indicate that [/FONT][FONT="]Ireland[/FONT][FONT="] requires reform in this area as a matter[/FONT]
[FONT="]of urgency.[/FONT]
[FONT="]The Group recognises that in the event of a sale of a home, a mortgage[/FONT]
[FONT="]shortfall debt, where such arises, becomes an unsecured personal debt still[/FONT]
[FONT="]owed to the mortgage lender. In all judicial and quasi judicial proceedings[/FONT]
[FONT="]such debt is treated on an equal basis with all other forms of unsecured debt.[/FONT]