Dáil Éireann Debate, Wednesday - 29 January 2014
37. Deputy Niall Collins asked the Minister for Finance the action he will take where certain banks are refusing to engage with persons in respect of mortgage arrears and threatening repossessions; if his attention has been drawn to the deep concern being created in this regard; and if he will make a statement on the matter. [4410/14]
View answerThe Central Bank's Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or already in arrears on a mortgage which is secured on a primary home. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers.
The CCMA is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law. The CCMA sets out the framework that lenders must use when dealing with borrowers in mortgage arrears or in pre-arrears. This framework is known as the Mortgage Arrears Resolution Process (MARP) which sets set out the steps which lenders must follow:
Step 1: Communicate with borrower; Step 2: Gather financial information; Step 3: Assess the borrower's circumstances; and Step 4: Propose a resolution.
The CCMA provides an integrated and cohesive package of consumer protection measures and it 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.
The Central Bank has advised that, where a borrower believes that their lender has not complied with or in any way disregarded the Code of Conduct on Mortgage Arrears, he/she may make a complaint to their lender. The lender must seek to resolve the borrower's complaint in line with the complaints handling process set out in provisions 10.7 to 10.12 of the Central Bank's Consumer Protection Code.
Each lender must also have an appeals process in place to enable a borrower to appeal in relation to a decision of the lender, including:
1. Where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;
2. Where a lender declines to offer an alternative repayment arrangement to a borrower; and
3. Where a lender classifies a borrower as not co-operating.
For this purpose, each lender must establish an Appeals Board to consider and determine any such appeals submitted by borrowers. If the borrower remains dissatisfied following the outcome from the complaints or appeals process, he/she may then refer the matter to the Financial Services Ombudsman who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers.
Likewise borrowers should also communicate and engage with their lender regarding a mortgage in difficulty as early and effective engagement between borrowers and lenders is key to resolving cases of mortgage difficulty. Where there is effective and meaningful engagement, the data shows that an increasing number of durable long term mortgage restructures is being put in place.
