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Code of Conduct on Mortgage Arrears

Dáil Éireann Debate, Tuesday - 14 May 2019

Tuesday, 14 May 2019

Questions (117)

Michael McGrath

Question:

117. Deputy Michael McGrath asked the Minister for Finance if a borrower is entitled at all times to pay off the arrears owed in full at any point in time and if it is not open to the loan owner to refuse to accept such a payment of arrears against the loan account in the context of a buy-to-let loan on a residential property; if the Central Bank has encountered instances of this practice; and if he will make a statement on the matter. [20453/19]

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Written answers

I have been advised by the Central Bank of Ireland that the arrears handling provisions of the Central Bank’s Consumer Protection Code 2012 (CPC) apply to loans provided to consumers that are not covered by the Code of Conduct on Mortgage Arrears (CCMA), including Buy To Let mortgages of personal consumers. Credit institutions, retail credit firms and credit servicing firms are all required to comply with the Consumer Protection Code.

In relation to arrears, the relevant rules in the CPC cover the following matters:

i) Having written procedures in place for the handling of arrears

ii) Provision of information to consumers in arrears

iii) That the regulated entity must, if requested, deal with a nominated third party of the personal consumer in relation to their arrears

iv) Revised repayment arrangements

v) Communication with consumers in arrears.

With respect to arrears resolution, the Code requires a lender to seek to agree an approach that will assist the personal consumer in resolving the arrears.

Where arrears arise on an account and where a personal consumer makes an offer of a revised repayment arrangement that is rejected by the regulated entity, the regulated entity must formally document its reasons for rejecting the offer and communicate these to the personal consumer, on paper or on another durable medium.

The Central Bank has informed me that it has not been made aware of any instances of this practice.

While every individual case would need to be considered on its own merits, the Central Bank’s expectation would be that no regulated entity should refuse the payment, if a consumer who is in mortgage arrears elects to pay off their full outstanding mortgage debt.

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