Holly Cairns
Question:513. Deputy Holly Cairns asked the Minister for Finance his views on additional mortgage deferment for employees whose income has been impacted by Covid-19; and if he will make a statement on the matter. [15923/21]
View answerWednesday, 24 March 2021
Questions (513, 514)
Holly Cairns
Question:514. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to remove the policy of excluding employees working in businesses that avail of the employment wage subsidy scheme from new mortgage applications and other personal funding applications; and if he will make a statement on the matter. [15924/21]
View answerWritten answers
I propose to take Questions Nos. 513 and 514 together.
I appreciate that the Covid-19 restrictions are still impacting many mortgage borrowers. However, borrowers have a suite of regulatory protections, such as the Central Bank's Code of Conduct on Mortgage Arrears and the Consumer Protection Code, and lenders have specific obligations to support and work with borrowers who are continuing to experience loan difficulty because of Covid-19 or indeed for any other genuine reason. In this regard, the Central Bank has confirmed that there is no regulatory impediment to lenders offering further payment breaks to borrowers, providing they are appropriate for the individual borrower circumstance. The BPFI has also confirmed that standard payment breaks continue to be part of the wide range of tailored solutions which are being made available to customers upon assessment of their situation. Therefore, any borrower who needs further support in relation to a mortgage or any other loan should in the first instance contact their lender.
In relation to new lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were impacted by Covid-19 on a case by case basis and that they are taking a fair and balanced approach. Therefore, if mortgage applicants have any queries or concerns about the status of their mortgage application they should, in the first instance, contact their lender directly on the matter.
However, it should also be noted that there are certain consumer protection requirements which govern the provision of mortgage credit to consumers. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.
In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested. Subject to these particular regulatory requirements, it is then a commercial matter for each lender to set its own credit policies and to make its own decisions on individual credit applications.
If a mortgage applicant or an existing mortgage borrower is not satisfied with how a regulated entity is dealing with them, or they believe that the regulated entity is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated entity. If they are still not satisfied with the response from the regulated entity, the response to their complaint from the regulated entity is required to include details for the borrower on how to refer their complaint to the Financial Services and Pensions Ombudsman.