Pearse Doherty
Question:138. Deputy Pearse Doherty asked the Minister for Finance the frequency with which the Central Bank carries out assessments of lenders' compliance with the code of conduct on mortgage arrears. [16505/14]
View answerTuesday, 8 April 2014
Questions (138, 139)
Pearse Doherty
Question:139. Deputy Pearse Doherty asked the Minister for Finance the options for alternative repayments under the code of conduct on mortgage arrears; and if he will provide in tabular form if each lender covered by his Department's mortgage restructuring data offers each option or not. [16506/14]
View answerWritten answers
I propose to take Questions Nos. 138 and 139 together.
The Central Bank regularly conducts inspections to ensure compliance with all of its codes of conduct, including the Code of Conduct on Mortgage Arrears (CCMA). The following are the inspections which the Central Bank has conducted on the CCMA since its introduction in 2009:
- 2010 inspection conducted on specific provisions of the CCMA regarding the issuing of formal demand letters, applications to the courts to commence enforcement of legal action on repossession of a borrower's primary residence and entering arrangements;
- 2011 inspection which examined compliance with the requirement of CCMA specifically relating to charges on mortgage accounts in arrears;
- 2012 inspection which examined compliance with the CCMA requirements relating to contact with borrowers and the appeals process required under the CCMA.
In 2013, the Central Bank undertook a review of practices by credit institutions in areas of the arrears process covered by the CCMA to inform its review of the CCMA which was conducted in 2013. In 2013 it also conducted independent research into the experience of borrowers facing or in mortgage arrears who are engaging in the CCMA's Mortgage Arrears Resolution Process (MARP). Borrowers surveyed indicated that they were positive about their overall experience when interacting with their lenders during the MARP process, with 73% of borrowers indicating that their lender had been professional in its dealing with them and 64% noting their lender's helpfulness. Other findings included:
- 71% of borrowers were positive about the ease of completing the Standard Financial Statement (SFS) lenders must use to gather financial information on a borrower's circumstances in order to inform any new arrears arrangements;
- 71% of borrowers surveyed had entered into an alternative arrangement with their lender as a result of MARP and 80% of those completing an SFS entered a revised agreement;
- Of the 10% of borrowers who used the MARP's appeals process, 60% stated that they had successfully negotiated a more suitable/sustainable arrangement;
- a third of consumers claimed that their lender did not have a discussion with them regarding other debts.
Following the introduction of the revised CCMA on 1 July 2013, the Central Bank also carried out an inspection of lenders' implementation of the revised CCMA. The Central Bank's plan for themed inspections in 2014 includes an inspection of mortgage lenders to test compliance with the revised CCMA.