Dáil Éireann Debate, Tuesday - 23 January 2018
171. Deputy Robert Troy asked the Minister for Finance if a person goes through the bankruptcy process in the UK, the way in which this affects their credit rating and future chances of being approved for a mortgage here. [2928/18]
Amharc ar fhreagraThe European Union (Consumer Mortgage Credit Agreements) Regulations and the Central Bank's Consumer Protection Code requires lenders to carry out an assessment of a mortgage borrower's credit-worthiness, and the Regulations also provide that lender shall only make mortgage credit available where the result of the assessment indicates that the borrower's obligations are likely to be met in the manner required under the proposed credit agreement. This assessment must also include the consideration of the results of a test on the personal consumer’s ability to repay the mortgage instalments, over the duration of the agreement, on the basis of a two per cent interest rate increase, at a minimum, above the interest rate offered to the personal consumer. (This two per cent test does not apply to mortgages where the interest rate is fixed for a period of five years or more). In order to conduct such an assessment, the lender is required to obtain and record sufficient financial and personal information from the consumer which is necessary, sufficient and proportionate. In due course the lender will also be obliged to access the information held on the Central Credit Register in relation to a mortgage or other qualifying credit application.
The policy responsibility for personal insolvency law, including its cross border aspects, are a matter for the Minister for Justice and Equality. However, from a financial services perspective there is no specific legal requirement or Central Bank guidance to financial institutions on the consideration of evidence of bankruptcy in the UK as part of the mortgage loan application process. Subject to compliance with applicable legislative and regulatory requirements, the decision to grant or refuse credit is a commercial decision by the individual regulated mortgage lender.
