Dáil Éireann Debate, Tuesday - 17 November 2020
277. Deputy Imelda Munster asked the Minister for Finance the number of borrowers that have applied on a case-by-case basis to their lenders to secure relief on their mortgage obligations since the mortgage payment breaks facility ended at the end of September 2020; the number of cases that have been refused relief since the end of September 2020; and if he will make a statement on the matter. [36832/20]
View answerOn 18 March last, the Banking and Payments Federation of Ireland (BPFI) announced a coordinated approach by banks and other lenders to help their customers who were economically impacted by the COVID-19 crisis. The measures included flexible loan repayment arrangements where needed, including loan payment breaks initially for a period up to three months and then subsequently extended for up to six months. The closing date for new applications under this general moratorium was 30 September 2020. While this was a welcome initiative and it allowed necessary relief to be quickly and efficiently provided to borrowers, each individual’s position is different and that’s why a case-by-case approach is now the best approach as some sectors of the economy are more impacted than others.
The Tánaiste, the Minister for Public Expenditure and Reform and I met the CEOs of the country’s retail banks and the Banking Payments Federation Ireland on 28 September and indicated that it is particularly vital that lenders work with their customers to ensure that suitable arrangements are put in place to assist their customers who are still experiencing difficulty.
I am advised by the Central Bank that the vast majority of COVID-19 mortgage payment breaks have expired and that the lenders are engaging with borrowers who require additional support. In that context the Central Bank has indicated that, as at the end of October, approximately 7,000 borrowers have been already been provided with additional financial support/forbearance or are completing an Standard Financial Statement (SFS) to determine the most appropriate type of continued forbearance. This is based on an individual or case-by-case assessment by lenders of those borrowers’ financial circumstances following a request by the borrower.
The Bank also advises that the number of borrowers in receipt of additional payment relief is set to increase as regulated firms continue to engage with borrowers and complete the SFS process with them. This is reflected in firms’ forecasts and operational planning and resourcing, as well as in their ongoing ‘outreach’ activity designed to support as early borrower engagement as possible.
There are a number of reasons why a request for additional mortgage payment relief does not proceed. These include:
- the borrower does not wish to proceed once the impact on the overall/total cost is explained;
- the SFS assessment concludes that it is in the borrowers best interests to now resume full repayments.
The Central Bank has said that the numbers of rejected requests are not reported as significant at this early stage but that it is an area of ongoing focus of supervisory engagement.
I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection framework will be fully available to mortgage and other borrowers that will still need support due to the economic impact of COVID-19.
