Eugene Murphy
Question:94. Deputy Eugene Murphy asked the Minister for Finance the guidelines that banks use when calculating the ability to pay of a person in mortgage arrears; and if he will make a statement on the matter. [12555/18]
View answerTuesday, 20 March 2018
Questions (94)
Written answers
I refer the Deputy to the Code of Conduct on Mortgage Arrears (CCMA).
The completion of affordability assessments is a key step in the Mortgage Arrears Resolution Process set out in the CCMA (Step 3 - Assessment). In this regard regulated entities must examine each case on its individual merits and it must base its assessment on the full circumstances of the borrower, including:
a) the personal circumstances of the borrower;
b) the overall indebtedness of the borrower;
c) the information provided in the standard financial statement;
d) the borrower’s current repayment capacity; and
e) the borrower’s previous repayment history. (See Provision 37 of the CCMA).
While the CCMA obliges lenders to explore all of the options for alternative repayment arrangements (ARA) offered by that lender under step 4 of the MARP, it does not oblige lenders to offer and apply a particular set of options nor does it approve the specific options that a lender does offer. The Central Bank has focused on providing a fair and consistent process for the borrower through the CCMA, the MART audits and against defined Sustainability Guidelines. The Central Bank of Ireland published sustainability guidelines, published in September 2013 and subsequently updated them in June 2014. The guidelines are available at http://www.centralbank.ie/regulation/industry-sectors/credit-institutions/Documents/Internal%20Guideline%20-%20Sustainable%20Mortgage%20Arrears%20Solutions.pdf).