I am advised that the Special Liquidators of IBRC are maintaining contact with its mortgage holders and with the Central Bank (as part of its overall Mortgage Arrears Resolution Strategy (MARS) process) with a view to appropriately dealing with INBS mortgage holders in arrears on their mortgage. The Special Liquidators also confirm that the residential mortgage customers of IBRC (in Special Liquidation) continue to enjoy the protection of the Central Bank Code of Conduct on Mortgage Arrears and other protections in Irish consumer law. As of the end of May 2013 details of the IBRC Mortgage book are as follows:
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-
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PDH
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-
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BTL
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-
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Number of borrowers
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11,057
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83%
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2,189
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17%
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Number of loans
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14,756
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85%
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2,655
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15%
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The Central Bank’s Code of Conduct on Mortgage Arrears, which applies to all mortgage lending activities of all regulated entities, except Credit Unions, operating in the State, remains a key protection for those cooperating INBS/IBRC mortgage holders who are in difficulty in meeting their mortgage commitments. The Code provides, inter alia, that mortgage lenders should allow for a flexible approach in the handling of arrears and pre-arrears cases and that they should aim, as far as possible, at assisting the borrower who is in genuine difficulty having regard to the specific circumstances in individual cases. In particular, the Code provides that a lender’s Arrears Support Unit (ASU) must base its assessment of the borrower’s case on the full circumstances of the borrower including:
- the personal circumstances of the borrower;
- the overall indebtedness of the borrower;
- the information provided in the standard financial statement (SFS);
- the borrower’s current repayment capacity, and
- the borrower’s previous history.
In relation to the sale of the IBRC mortgage book, the Special Liquidators are taking professional advice on the appropriate method of disposing of loan assets and on the appropriate criteria for determining who should qualify to bid for loan assets. As part of this process the Special Liquidators have also written to all IBRC borrowers to update them on the sale of their IBRC Loans and Collateral Obligations and providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. The Special Liquidators are under instruction to ensure that the valuation of all IBRC assets is completed by 30 November 2013 and that the sale of all IBRC assets is agreed or completed by no later than 31 December 2013 or as soon as practicable thereafter.
I am advised that the contractual terms and conditions of customer mortgages and other borrowings will not change as a result of the appointment of the Special Liquidators or the ultimate sale of the obligations to a third party. The continued applicability of the Central Bank Code of Conduct on Mortgage Arrears and Mortgage Arrears Targets Programme will depend on the regulatory status of the ultimate acquirer of the portfolio which we will not know until the sales process has concluded. In the event that NAMA ultimately acquires this portfolio, the NAMA Board will determine its strategy at that stage and will, in doing so, be mindful of its legal obligations.
