121. Deputy Clare Daly asked the Minister for Justice and Equality further to Parliamentary Question No. 126 of 7 February 2019, if the MABS-Abháile scheme will be broadened to include analysing mortgage accounts to examine if the accounts were run correctly and to establish if the product was suitable for the distressed families or if the accounts have been affected by the tracker scandal; and if he will make a statement on the matter. [8608/19]
Minister for Justice and Equality (Deputy Charles Flanagan): Abhaile, the national mortgage arrears resolution service, began operation in July 2016 and was formally launched by the Government in October 2016 to help people who are insolvent and at risk of losing their homes due to mortgage arrears (‘borrowers’).
Abhaile provides access, without charge to the borrower, to a range of independent expert financial and/or legal advice and assistance, to help identify and put in place the most appropriate solution for resolving the borrower’s arrears and, wherever possible, keeping them in their home. The Abhaile Scheme is jointly coordinated by my Department and the Department of Employment Affairs and Social Protection. It is operated by the Money Advice and Budgeting Service (MABS), working together with the Insolvency Service of Ireland (ISI), the Legal Aid Board and the Citizens Information Board.
MABS acts as the gateway to the Abhaile suite of services and will direct the borrower to the advice services best suited to address his or her individual mortgage arrears situation. Financial advice and negotiation assistance may be provided under Abhaile by a Personal Insolvency Practitioner (PIP) on the Abhaile PIP panel, a (Dedicated Mortgage Arrears) DMA adviser working with MABS, and/or an accountant on the Abhaile panel, as appropriate.
The role of a Personal Insolvency Practitioner in advising and assisting the borrower is to be future focused, aims to make the mortgage sustainable, and to help the borrower to identify the most appropriate solution and to get it into place. Personal Insolvency Practitioners already deal with tracker arrears cases and will always review the history of the mortgage account in front of them. Even in cases where it is assessed that no tracker issue exists, the ISI indicates that many PIPs include a term within the Personal Insolvency Arrangement (PIA) such that if a tracker issue only becomes known in the future, the Arrangement already provides for how it is to be treated. The PIP is required to ensure that a restructured home mortgage within a PIA is sustainable for the debtor, and returns the debtor to solvency.
In addition, if any legal issues emerge in relation to the mortgage, the PIP can refer the borrower to receive free legal advice from a Consultation Solicitor under Abhaile with relevant expertise.
MABS provide a Dedicated Mortgage Arrears Service (DMA), which has been incorporated into the Abhaile Scheme, across the MABS network and this will often be the first point of contact under the Scheme for a person in arrears with their home mortgage. Specialist DMA advisors are working across 27 locations countrywide, assisting borrowers to assess the options available to them and, where required, negotiating with lenders on their behalf.
The DMA process is a structured one which involves both gathering and analysing full borrower history and information together with supporting documentation, including original loan agreements, in order to complete a Standard Financial Statement (SFS) and generate a proposal to the lender. In the course of this process, advisers may identify issues relating amongst others, to the operation of the account, the Tracker Review and potential legal issues relating to the underpinning contract. Where such issues emerge, borrowers can be referred under Abhaile for additional expert support from an Abhaile accountant or a consultation solicitor with relevant expertise. MABS can also provide further support to borrowers with relevant appeals to lenders and to the Financial Services and Pensions Ombudsman.
I can reassure the Deputy therefore, that the Abhaile Scheme does not need to be specifically broadened as it is already dealing with the types of cases she has highlighted. Whether a borrower is provided with financial advice and assistance by a Dedicated Mortgage Adviser through MABS or by a PIP, the suitability and sustainability of the mortgage is being assessed with a view to providing the borrower with a sustainable solution to their arrears, including in cases impacted by the tracker mortgage issue.
The operation of the Abhaile Scheme is regularly reviewed and reports for the first two years of operation illustrating the high take-up and positive outcomes of Abhaile have been published on my Department’s website.