The Central Bank has just concluded a review of the Code of Conduct on Mortgage Arrears (CCMA) and I have no plans to repeat the review. The Central Bank's review included a public consultation process, with in excess of 230 submissions received. The revised CCMA was published on 27 June 2013 and came into effect yesterday, 1 July 2013. The submissions made, as well as feedback document outlining the Central Bank’s response to some of the main issues raised, are available on the Central Bank’s website www.centralbank.ie. The revised Code provides a framework which complements the work of the Central Bank which has for some time been intensively working with lenders to ensure that they have a range of longer term options, such as 'trade-down mortgages', 'split mortgages' and 'sale by agreement' or other appropriate options as may be developed by lenders for their customers with distressed mortgages. The CCMA provides an integrated and cohesive package of consumer protection measures for borrowers facing or in mortgage arrears. It reflects the current mortgage arrears situation and seeks to deliver on the following principles, to:
- ensure appropriate resolution of each borrower’s arrears situation;
- ensure that lenders deal with borrowers in a fair and transparent manner;
- support and facilitate meaningful engagement between lenders and borrowers; and
- ensure borrower awareness of the benefits of co-operating with their lender, and the consequences of not co-operating.
With regard to restructuring of mortgage loans, the CCMA requires lenders to explore all of the options for alternative repayment arrangements offered by that lender for each particular case.
In addition, where an alternative repayment arrangement is offered by a lender, the revised CCMA requires the lender to outline the reasons why the alternative arrangement offered is considered to be appropriate and sustainable, as well as the advantages and any disadvantages or potential disadvantages of any arrangement offered, with regard to the individual circumstances of the borrower.