Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

154. To ask the Minister for Finance if it is permissible for a bank to remove a tracker mortgage rate from a borrower in circumstances where the property in question is no longer the principal private residence of the borrower; and if he will make a statement on the matter. [6019/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is not possible to answer this question comprehensively for all mortgages as, by their very nature, mortgages are complex and can extend over a number of different loans for one particular borrower.

Firstly, any moves by lenders to remove tracker rate mortgages from borrowers can only be carried out in accordance with the underlying terms and conditions of the loans and the relevant consumer protection requirements.

The Central Bank has informed me that it has strong consumer protection requirements covering tracker rate mortgages which are set out in the statutory Consumer Protection Codes and the Code of Conduct on Mortgage Arrears. There are clear obligations on lenders to act in the best interests of customers, to disclose relevant material information to customers and/or to bring key items or key information to the attention of customers. Furthermore the Consumer Protection Code 2012 sets out specific requirements in respect of the treatment of personal customers exiting tracker rate mortgages. In the case of accounts in financial difficulty, the Central Bank's Code of Conduct on Mortgage Arrears applies to properties occupied by the borrower in the State or where the property is the only residential property owned by the borrower in the State. Under the CCMA a lender is permitted to offer a borrower an alternative repayment arrangement which requires the borrower to change from an existing tracker mortgage to another rate, but only as a last resort, where: all other options, which would retain the tracker rate, have been considered to be unsustainable; the arrangement offered is affordable for the borrower; and the arrangement is a long-term sustainable option.

I would also note that if a mortgage holder is not satisfied with a financial service provider's decision, the customer can make a complaint, using the financial service provider's internal formal complaints procedure. If they are not satisfied with the outcome they may wish to refer the matter to the Financial Services Ombudsman to have it independently investigated.

In addition, it may be useful to know that the Central Bank has embarked on a broader examination of tracker mortgage-related issues covering, among other things, transparency of communications with, and contractual rights of, tracker mortgage borrowers. The Central Bank has informed me that it expects significant progress to be made by all lenders before the end of 2016 and will provide an update on progress on its website by end April 2016.