Dáil Éireann Debate, Tuesday - 7 November 2023
330. Deputy Louise O'Reilly asked the Minister for Finance what options are available where lending institutions refuse to lend to a mortgage applicant where the applicant concerned has cystic fibrosis. [48391/23]
View answerThe Central Bank of Ireland is responsible for regulating the provision of mortgage and other credit by regulated financial services providers. As regulator, the Central Bank sets out macro prudential and consumer protection requirements which have the objective of protecting overall financial stability and the interests of consumers.
In line with this mandate, the Central Bank has specified certain loan to value and loan to income thresholds for mortgage lending. In addition, before providing a mortgage lenders are also required to undertake thorough creditworthiness assessments to ensure a borrower will be able to repay the mortgage. This assessment must take into account the individual circumstances of the borrower, including personal circumstances and financial situation.
Within the parameters of this regulatory framework, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity and, as the Minister for Finance, I have no function in such matters.
Where a lender refuses a mortgage application, the lender must inform the consumer without delay of the refusal. In addition, the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them, or they believe that the regulated firm 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 firm.
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.
As regards access to mortgage protection insurance in the context of an application for mortgage credit, I understand that there are financial brokers working on behalf of consumers who have specific medical conditions that may affect their applications for life cover as they would be better placed to understand which insurer might be more likely to provide cover in such circumstances.
Brokers Ireland has established a register of advisors/brokers who specialise in sourcing cover for individuals who have difficulty in obtaining life cover due to a pre-existing illness and which is available from their website. Insurance Ireland also operates a free Insurance Information Service for members of the public, which deals with general queries in relation to insurance cover.
This service can be accessed by constituents by calling 01-676-1820 or by emailing feedback@insuranceireland.eu.
In addition, there is a provision under Section 126 of the Consumer Credit Act 1995 whereby lenders can provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally.
For individuals, including those with underlying health conditions and who may experience difficulties acquiring mortgage protection insurance, this is an important provision that relevant mortgage applicants should be aware of and discuss with their lender.
