Catherine Murphy (Kildare North, Social Democrats)
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143. To ask the Minister for Finance if his attention has been drawn to the practice of banks removing persons from tracker mortgages that are in arrears; and if he will make a statement on the matter. [36331/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Central Bank has strong consumer protection requirements covering tracker rate mortgages which are set out in the statutory the Code of Conduct on Mortgage Arrears (2010 and 2013) and Consumer Protection Codes (2006 and 2012). 

In the case of tracker mortgages on a primary residence in financial difficulty, such borrowers are covered by the protections of the CCMA.  For the purposes of the CCMA, ‘primary residence’ means a property which is the residential property which the borrower occupies as his/her primary residence in the State, or a residential property which is the only residential property in the State owned by the borrower. Therefore, the protections of the CCMA only apply to buy-to-let mortgages if the residential property is the only residential property in the State owned by the borrower.

Provision 41 on the CCMA provides that the lender must not require the borrower to change from an existing tracker mortgage to another mortgage type, as part of any alternative repayment arrangement offered to the borrower, except in the circumstances set out in Provision 46. (Please see attached link: )

Provision 46 provides that, in the case of an existing tracker mortgage, if following consideration of the options in accordance with Provision 39, in conjunction with Provision 41, the lender concludes that none of the option(s) that would allow the borrower to retain his/her tracker interest rateis/are appropriate and sustainable for the borrower’s individual circumstances, the lender may, but only as a last resort, offer the borrower an alternative repayment arrangement which requires the borrowerto change from an existing tracker mortgage to another mortgage type, if that alternative repayment arrangement:

a) is affordable for the borrower, and

b) is a long-term sustainable solution which is consistent with Central Bank of Ireland policy on sustainability.

For mortgages in arrears that do not fall within the scope of the CCMA, (e.g. buy-to-let properties which are not the only residential property in the State owned by the borrower), the provisions of the Consumer Protection Code 2012 (the Code) apply. 

Under the Code 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. Further, the Code sets out specific requirements in respect of the treatment of personal customers exiting tracker rate mortgages. (Chapter 6 Provision 6.9 – 6.11 of the 2012 Code: ).

With respect to arrears resolution, the Code requires a lender to seek to agree an approach that will assist the personal consumer in resolving the arrears. However, it does not specifically prevent a lender from removing or amending a tracker rate on a buy-to-let mortgage in arrears.

As Minister for Finance I have not been made aware of any specific examples of the practice the Deputy refers to. If the Deputy is aware of such instances of banks removing persons that are in mortgage arrears from their tracker mortgage that are in breach of either the Code of Conduct on Mortgage Arrears or the Consumer Protection Code 2012  then I would urge the Deputy to bring this information to the attention of the Central Bank.

The Deputy may also wish to note that the Central Bank’s Tracker Mortgage Examination requires all lenders, which offered tracker interest rate mortgages to their customers, to review all mortgage accounts, including accounts in arrears, to identify any tracker related failings both from a contractual and transparency perspective. 

The Central Bank provided a comprehensive update on the Tracker Mortgage Examination in April 2018, which is available at: .