Tuesday, 5 February 2019

Ceisteanna (163)

Michael McGrath

Ceist:

163. Deputy Michael McGrath asked the Minister for Finance if a lender can issue a mortgage to a person immediately after they have been discharged from bankruptcy assuming all other macroprudential requirements have been fulfilled; if there is a time limit from the date of discharge within which a lender is prohibited from offering a mortgage; if so, the time limits used by each bank operating here with regard to mortgage loans; and if he will make a statement on the matter. [5160/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

There are a number of consumer protection and other financial services regulatory provisions in place which govern the provision of new mortgage credit to consumers. For example, there are measures in the Central Bank Consumer Protection Code and the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which, inter alia, require mortgage lenders, in the context of considering an application for mortgage credit, to carry out a credit worthiness assessment of the mortgage applicant and which also provide that a lender should only make mortgage credit available to the consumer where the result of that assessment indicates that the borrower’s obligations are likely to be met in the manner required by the proposed credit agreement.

In addition, the Central Bank’s macro prudential mortgage lending rules set out, subject to certain limited discretions, the maximum amount of a mortgage loan which can be provided to a consumer having regard to his/her income and the value of the residential property which will act as security for the loan.

However, there is no financial services regulatory measure which restricts or prevents a lender from providing a mortgage to a person who has been discharged from bankruptcy. (Bankruptcy law, however, provides that in respect of credit for more than €650, a person in bankruptcy is required to disclose his/her bankruptcy). Subject to compliance with all the relevant legal and regulatory provisions governing the provision of mortgage credit, it will be a commercial matter for each lender to decide in any particular case whether or not (or how much) credit to provide to a person who is making an application for credit.