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Mortgage Lending

Dáil Éireann Debate, Tuesday - 15 September 2020

Tuesday, 15 September 2020

Ceisteanna (261)

Steven Matthews

Ceist:

261. Deputy Steven Matthews asked the Minister for Finance if consideration has been given to entering further negotiations with the lending banks regarding a possible extension of mortgage breaks for those who continue to suffer significant drops in salary as a direct result of Covid-19. [23609/20]

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Freagraí scríofa

As the Deputy is aware, on 18 March the Banking and Payments Federation of Ireland (BPFI) announced a co-ordinated approach by banks and other lenders to help their businesses and personal customers who were economically impacted by the Covid-19 crisis. These measures included flexible loan repayment arrangements, and included a loan payment break of up to three months which was subsequently extended for up to a six month period.

The financial circumstances of many of the borrowers which availed of a Covid-19 payment break have now normalised and they are in a position to return to making payments. In that regard, the BPFI has indicated that the broad options available to borrowers coming off a payment break will be to return to payments over the existing term of the loan, or to extend the term of the loan so as to make the monthly repayments more affordable for the borrower. It is important that lenders and borrowers coming off a payment break will engage so as to select the most appropriate new repayment arrangement in their individual case.

Unfortunately, at the end of a payment beak there will be some borrowers who will continue to experience financial difficulty. In these circumstances, it will be particularly important that engagement should take place as early as possible. I would, therefore, encourage any borrower who feels he or she may have difficulty in resuming payments after a Covid-19 payment break to contact their lender and if possible to do so before the payment break end date. Borrowers have a suite of regulatory protections and lenders have specific obligations, under the Central Bank consumer protection framework, to support and work with borrowers in arrears or in pre-arrears. In particular, lenders are obliged to engage and work with co-operating borrowers to identify an appropriate and sustainable solution having regard to the particular circumstances of a case and that lenders should use the full suite of restructuring solutions available to them.

I will continue to work with the Central Bank, as regulator, and the industry to seek to ensure that banks continue to work with and pro-actively assist their customers who will still be experiencing difficulty at the end of a Covid-19 payment break and to ensure that the Central Bank consumer protection framework will be fully available to mortgage borrowers that will still need support.

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