The Central Bank, under its MARs project, has for some time been intensively working with lenders to ensure that they can offer a range of longer term options to their customers who are experiencing mortgage difficulty. These can include mortgage-to-rent, trade-down mortgages, equity participation, interest rate reduction, split mortgages and sale by agreement, or other appropriate options as may be developed by lenders. In addition, the Central Bank’s Code of Conduct on Mortgage Arrears is a key framework that governs the relationship between mortgage holders experiencing difficulty and their bank and it offers very worthwhile protections for mortgage holders who are in arrears or pre-arrears. The Code provides that a mortgage lender must, in the case of mortgage difficulty, consider all options for alternative repayment arrangements and must not apply to the Courts to commence legal action for repossession of the borrower’s primary residence until every reasonable effort has been made to agree an alternative arrangement. It also provides that where a borrower co-operates with the lender, the lender must wait at least twelve months from the date the borrower is classified as a MARP case before applying to the Courts. However, provision 48 of the Code outlines the circumstances, for example where the borrower does not cooperate with the lender, where the twelve month moratorium on the initiation of Court actions will not apply.
The Deputy may also wish to note that the Central Bank has commenced a review of the Code of Conduct on Mortgage Arrears, which will shortly involve a public consultation process, to take account of recent developments, such as the new personal insolvency legislation. Subject to compliance with this Code, it is a matter for lenders to take the legal actions it considers necessary to protect and enforce its rights as provided for in mortgage law and contracts.