762 Deputy Michael Creed asked the Minister for the Environment, Heritage and Local Government the content of circulars issued by him to local authorities outlining the parameters within which they can deal with housing loan clients who are in arrears; if he will authorise them to allow loan holders to opt for interest only payments for a period of time; if he will instruct local authorities to desist from attempts at repossession in the current climate; and if he will make a statement on the matter. [48214/10]

Where any borrower, either from a local authority or from a private financial institution, is facing difficulties in meeting mortgage repayments, they should engage proactively and constructively with the lender to seek to achieve an agreed solution. The services of the Money Advice and Budgetary Service are also available to such borrowers and support is available through the Supplementary Welfare Allowance Scheme. In addition, I issued comprehensive guidance last year based on the Regulators Code of Practice, to ensure that cases of local authority mortgage arrears are handled in a manner that is sympathetic to the needs of the particular household, while also protecting the position of the local authority concerned.

In addition Section 34 of Housing (Miscellaneous Provisions) Act 2009 provides Local Authorities with powers to deal flexibly with distressed borrowers. Repossession, where it does occur, is always a last resort.