Dáil Éireann Debate, Thursday - 15 May 2014
68. Deputy Sandra McLellan asked the Minister for Finance if mortgage providers are permitted to penalise persons who sell their home while they have an outstanding mortgage in order to clear their debt (details supplied) in County Cork; and if he will make a statement on the matter. [22022/14]
Amharc ar fhreagraI am advised by the Central Bank that in relation to the provision of credit, the Central Bank's Consumer Protection Code 2012 (2012 Code) sets out rules on early repayment. Where a regulated entity offers credit on a fixed interest rate to a personal consumer, or offers a personal consumer the option to fix their rate or to switch to a fixed rate on an existing credit agreement, the regulated entity must provide, in the credit documentation, a worked example specific to the personal consumer of the early redemption charge in monetary terms and details in relation to the calculation of this charge.
The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) may be relevant where a borrower is in arrears or pre-arrears on his/her primary residence. Where a lender does not offer a borrower an alternative repayment arrangement, where a borrower is not willing to enter into an alternative repayment arrangement offered by the lender or where a borrower has been classified as not co-operating, the lender must inform the borrower on paper or another durable medium of other options available to the borrower, such as voluntary surrender, trading down, mortgage to rent or voluntary sale and the implications of each option for the borrower. His/her mortgage loan account shall include:
(i) an estimate of associated costs or charges where known and, where not known, a list of the associated costs or charges;
(ii) the requirement to repay outstanding arrears, if this is the case,
(iii) the anticipated impact on the borrower's credit rating, and
(iv) the importance of seeking independent advice in relation to these options.
On the issue more generally, if a customer has made a formal complaint to the financial service provider in question and is not satisfied with the outcome, then the matter can be referred to the Financial Services Ombudsman.
The Financial Services Ombudsman investigates, in an impartial and independent manner, complaints from individual customers and small businesses who have unresolved disputes with financial service providers which are either regulated by the Central Bank or, are subject to the terms of the Consumer Credit Act 1995. All personal customers, unincorporated bodies, charities, clubs, partnerships, trusts, and limited companies with a turnover of €3,000,000 or less can complain to the Ombudsman.
Investigations by the Financial Services Ombudsman are free of charge to the customer.
