Robert Dowds
Ceist:126 Deputy Robert Dowds asked the Minister for Finance his approach towards assisting families coping with stressed mortgages; and if he will make a statement on the matter. [24655/11]
Amharc ar fhreagraTuesday, 20 September 2011
Ceisteanna (99, 100)
Freagraí scríofa
There are a number of measures in place to assist people who are having genuine difficulties in meeting their mortgage repayments. The Central Bank's revised Code of Conduct for Mortgage Arrears (the Code) applies to mortgage lending activities with consumers in respect of their principal private residence in the State. Compliance with the Code is mandatory on all mortgage lenders registered with the Central Bank. The Code came into effect on 1 January 2011. With effect from 30 June 2011, lenders must have in place the required systems and trained staff necessary to support the implementation of the Code. The Code sets out the framework that lenders must use when dealing with borrowers who are in arrears or are in pre-arrears. For the purposes of the Code a "pre-arrears" case arises when the borrower contacts the lender stating that he or she is in danger of getting into financial difficulties and/or is concerned about getting into mortgage arrears. The Code can be accessed at www.centralbank.ie.
The main provisions of the code are as set out as follows:
(1) Lenders must establish a Mortgage Arrears Resolution Process know as "MARP" and use this framework when dealing with consumers who are in arrears or in pre-arrears situations.
(2) The lender must not apply to the courts to commence legal action for repossession of the borrower's primary residence until every reasonable effort has been made to agree an alternative arrangement with the borrower or his/her nominated representative.
(3) Where a borrower co-operates with the lender, the lender must wait at least 12 months from the date the borrower is classified as a MARP case (i.e. 31 days from the date the arrears first arose) before applying to the courts to commence legal action for repossession of a borrower's primary residence.
(4) Where a borrower is in mortgage arrears, a lender may commence legal action for repossession of the property without the 12 month period applying, only in the following circumstances:-
where a borrower does not co-operate with the lender,
in the case of fraud perpetrated on the lender by the borrower, or
in the case of a breach of contract by the borrower other than the existence of arrears.
(5) A lender must not require a borrower to change from an existing tracker mortgage to another mortgage type as part of an alternative arrangement offered to the borrower in arrears or in pre-arrears.
(6) Lenders must establish an Appeals Support Unit which must be adequately staffed, to manage cases under the MARP.
(7) Borrowers can make an appeal in relation to the decision of the Arrears Support Unit and the lender's treatment of the borrowers under the MARP, to an internal Appeals Board which lenders are required to establish. The Central Bank has produced, with input from the National Consumer Agency, a consumer guide to assist consumers in understanding the new process under the revised Code that they should expect from lenders. The guide together, with a number of questions and answers, are available on the Central Bank's website www.centralbank.ie.
Financial assistance is available to eligible claimants under the Department of Social Protection's Mortgage Interest Supplement Scheme.
People in debt or in danger of getting into debt can avail of the services of the Money Advice and Budgeting Service. This is a national, free, confidential, and independent service.
The Deputy may wish to note that a Working Group has been established under the Economic Management Council to consider the state of implementation of the main recommendations in the report of the Mortgage Arrears and Personal Debt Group. This Group has also been asked to consider and develop further necessary actions to alleviate the increasing mortgage over-indebtedness problem. I expect that the Group will complete its work in the very near future.
Robert Dowds
Ceist:127 Deputy Robert Dowds asked the Minister for Finance if he has given directions to the banks and other lending agencies on the way they are to deal with persons unable to cope with mortgages which they are unable to pay either in part or full; if so, if these banks and lending agencies are carrying out his direction; and if he will make a statement on the matter. [24656/11]
Amharc ar fhreagraI have not issued directions to the banks and to other lending agencies on the manner in which they are to deal with their customers. However, I would like to inform the Deputy that, following the publication of the report of the Mortgage Arrears and Personal Debt Group in November 2010, the Central Bank revised its Code of Conduct on Mortgage Arrears (CCMA). The revisions were to reflect many of the recommendations in the report, including the key recommendations relating to the introduction by all lenders, regulated by the Central Bank, of a standardised Mortgage Arrears Resolution Process (MARP).
The revised CCMA came into effect on 1 January 2011 and can be assessed at www.centralbank.ie. Lenders are legally required to comply with the CCMA. With effect from 30 June 2011, lenders must have in place the requisite systems and trained staff necessary to support the implementation of the MARP.
lenders are prohibited from moving borrowers in arrears from existing tracker mortgages,
penalty interest charges may not be imposed on borrowers in arrears who co-operate with the MARP,
harassment of borrowers through unsolicited communication is outlawed,
borrowers in financial difficulties, but not in arrears, are allowed to come under the MARP,
when determining the 12 month period that the lender must wait before applying to the courts to commence legal action, the lender must exclude any time period during which the borrower is complying with the terms of an alternative repayment arrangement, making an appeal to the internal appeals board or making a complaint to the Financial Services Ombudsman.