Dáil Éireann Debate, Tuesday - 24 March 2015
276. Deputy Billy Timmins asked the Minister for Finance his plans to hold discussions with the banks or bring forward legislation to prevent banks adding their legal fees onto bank charges of persons who they are taking to court seeking repossession of their house; and if he will make a statement on the matter. [11891/15]
View answerThe Consumer Credit Act provides that any communication issued by or on behalf of a mortgage lender to a borrower which refers to the possibility of possession proceedings being taken under the mortgage, shall contain an estimate of the cost to the borrower of such proceedings.
This requirement is spelt out in more detail in the CCMA and at various points in the MARP process, the lender is required to provide information to the borrower that, with regard to the potential for legal proceedings, irrespective of how the property is repossessed and disposed of, the borrower will remain liable for the outstanding debt, including any accrued interest, charges, legal, selling and other related costs, if this is the case.
Furthermore, the CCMA also requires a lender, following possession and disposal of the secured properties, to notify the borrower of the amount of any costs arising from the disposal which have been added to the mortgage loan account.
Also, in applying the proceeds arising from the sale of the property, the Court may allow for the payment of all charges, costs and expenses properly incurred by the lender as incident to the sale of the property.
However, the CCMA also provides that lenders are restricted from imposing charges and/or surcharge interest on arrears in respect of a primary residence mortgage unless the borrower is "not co-operating". I would therefore, strongly encourage borrowers experiencing mortgage difficulty to communicate and co-operate with a lender to address a mortgage problem and I would ask lenders to address and deal with such problems in a sympathetic way and seek to assist the borrower to meet the mortgage obligations in a sustainable way.
