Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank Deputy Durkan for raising the matter. In the first instance I wish to express my sincere condolences to the borrower on her recent bereavements. In this case I assume the Deputy is referring to a borrower whose mortgage is held by the entity to which he referred in the details supplied. This entity in question is authorised on a transitional basis on the Central Bank's register of credit servicing firms. This provides for entities to be authorised until the Central Bank has granted or refused their authorisation as long as they were carrying on the activity of a credit servicing firm before the requirement to be authorised. While under consideration for full authorisation, the loan owners nevertheless still have to comply with a suite of consumer protection and other regulatory requirements, including the Central Bank's statutory codes, and therefore the consumer protections which applied when the loan was initially made continue to apply fully following the purchase of a loan by the new creditor, which I will detail now.

The code of conduct on mortgage arrears, the CCMA, in particular provides a strong consumer protection framework for borrowers who are in arrears or pre-arrears on a mortgage loan secured on a primary residence. The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.

The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It also sets out the mortgage arrears resolution process, MARP, which is a four-step process that regulated entities must follow. The key step in this MARP is the resolution of a particular mortgage difficulty. In this regard, the CCMA requires, in respect of a co-operating borrower, regulated entities to explore all of the options for an alternative repayment arrangement, ARA, offered by that lender. Furthermore, the regulated entity is required to document its considerations of each option examined, including the reasons the option or options offered are appropriate and sustainable in the individual circumstances of the case and also the reason options considered and not offered are not appropriate and not considered to be sustainable for the borrower's individual circumstances.

Where a regulated entity does not offer an ARA it must, among a range of requirements, set out on paper or another durable medium the reasons for that decision to the borrower, inform the borrower of the other options available to him or her, such as a voluntary sale or mortgage to rent, and inform the borrower of his or her right to appeal the decision under the CCMA to the lenders appeal board and also the right to consult a personal insolvency practitioner. In addition, following an internal CCMA appeals process, the regulated entity will also be required to inform the borrower of her right to refer the matter to the statutory Financial Services and Pensions Ombudsman of Ireland.

It is also necessary for the lender to engage in real, effective and proportionate communication with the borrower. In this regard, it should be noted that provision 8 of the CCMA provides that at the borrower's request and with the borrower's written consent the lender must liaise with a third party nominated by the borrower to act on her behalf in relation to her arrears situation. That is an important provision but it is also a very clear rule, which is at the heart of the Deputy's question. The lender must liaise with a third party nominated by the borrower. For example, for borrowers relying on the help of the Money Advice and Budgeting Service, MABS, the lender must engage with that service. However, the provision does not prevent the lender from contacting the borrower directly regarding other matters or issuing communications required under the code directly to the borrower. Furthermore, under provision 22, a lender must ensure that the level of communications is proportionate, that communications are not aggressive, intimidating or harassing and that borrowers are given sufficient time to complete required actions. I hope this will offer assistance to the Deputy in his engagement with the constituent who is experiencing mortgage difficulty.

See this speech in context