Written answers

Tuesday, 1 July 2014

Department of Finance

Mortgage Arrears Proposals

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Independent)
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145. To ask the Minister for Finance with regard to the monthly limit on unsolicited communications if the consumer protection code 2012 and the Code of Conduct on Mortgage arrears are applicable to those in arrears who have reached a repayment agreement with their bank; and if he will make a statement on the matter. [28320/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am informed by the Central Bank that the Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders when dealing with borrowers facing or in mortgage arrears. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up repayments on a mortgage loan which is secured on a primary residence are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers in genuine mortgage difficulty.  In order to ensure that engagement between lender and borrower is facilitated, the current version of the CCMA puts a greater emphasis on a more qualitative approach to contacts and the previous limit of three unsolicited contacts per month is replaced by a requirement for the lender to draw up a board approved contacts policy.

With regard to the level of communications from a lender to a borrower, the CCMA now provides that:

Provision 21. A lender must produce and implement a policy regarding communications with borrowers. That policy must be approved by the board of directors and must ensure that the requirements of Provision 22 are met.

Provision 22. A lender must ensure that:

a) the level of communications from the lender, or any third party acting on its behalf, is proportionate and not excessive, taking into account the circumstances of the borrowers, including that unnecessarily frequent communications are not made;

b) communications with borrowers are not aggressive, intimidating or harassing;

c) borrowers are given sufficient time to complete an action they have committed to before follow up communication is attempted. In deciding what constitutes sufficient time, consideration must be given to the action that a borrower has committed to carry out, including whether he/she may require assistance from a third party in carrying out the action; and

d) steps are taken to agree future communication with borrowers.

Communication is defined, in the CCMA, as "the imparting or exchanging of information between a lender and a borrower by speaking, on paper or another durable medium, or using any other medium.  In addition, a lender must maintain records of all communications with borrowers in mortgage arrears or pre-arrears including recordings of all Arrears Support Unit telephone calls made to or from a borrower in relation to his/her arrears or pre-arrears.  The intention of this provision is to strengthen protection for borrowers by facilitating compliance monitoring.

If a borrower is not happy with the way that their lender is dealing with them or if they think they are not complying with the CCMA, the borrower can make a complaint to their lender. If the borrower is not happy with the outcome of the appeal/complaint made to the lender they can refer the matter to the Financial Services Ombudsman (FSO). Further information on how to make a complaint to the FSO is available at .

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