Tuesday, 29 September 2020

Ceisteanna (83, 90)

Louise O'Reilly


83. Deputy Louise O'Reilly asked the Minister for Finance if he will be liaising with banks that have withdrawn mortgages for couples due to the fact one of them has been put on the temporary wage subsidy scheme by their employer even though the person on the scheme will be reinstated to 100% of their wages once the scheme is completed; and if he will make a statement on the matter. [17496/20]

Amharc ar fhreagra

Pádraig O'Sullivan


90. Deputy Pádraig O'Sullivan asked the Minister for Finance his plans to assist homebuyers that are being refused drawdown of approved loans to one or both borrowers due to being on the temporary wage subsidy scheme; and if he will make a statement on the matter. [26811/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 83 and 90 together.

I appreciate the concerns many people are experiencing about mortgage applications and drawdowns at this difficult time, and my Department is maintaining close contact with the Central Bank and Banking and Payments Federation Ireland (BPFI) as the lending industry works to address the difficulties caused by the Covid-19 situation. Also, the Central Bank has advised that it expects all regulated firms to take a consumer-focused approach and to act in their customer's best interests at all times, including during the Covid-19 pandemic.

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. The BPFI has published a Covid-19 Support FAQ document which customers can consult, or customers can contact their lender directly, if they have any queries or concerns about the impact of COVID-19 on their mortgage application (https://www.bpfi.ie/key-topics/mortgages-covid-19-support-faq/).

However, within the parameters of the regulatory framework below, the decision to grant or refuse an individual application for mortgage credit, or temporarily suspend a mortgage approval in principle, is a commercial and contractual decision to be made by the regulated entity and it is not appropriate or possible for me to instruct lenders in that regard. Furthermore, a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown and, in such cases, the decision to withdraw or vary the offer is also a commercial decision for the lender.

The European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness. The assessment must take appropriate account of factors relevant to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement and must be carried out on the basis of necessary, sufficient and proportionate information on the consumer’s income and expenses and other financial and economic circumstances. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. Also, the Central Bank’s Consumer Protection Code 2012 also imposes ‘Knowing the Consumer and Suitability’ requirements on lenders, which require lenders to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. 

However, if a mortgage applicant is not satisfied with how a regulated firm is dealing with them, or they believe that the firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the Financial Services and Pensions Ombudsman.