Réada Cronin (Kildare North, Sinn Fein)
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296. To ask the Minister for Finance his plans to assist homebuyers that are being refused drawdown of approved loans due to one or both borrowers being on the temporary wage subsidy scheme in view of the fact that refusal can see them lose both their new home and deposit; and if he will make a statement on the matter. [19779/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I fully appreciate the difficulties that people on the Temporary Wage Subsidy Scheme are experiencing in relation to mortgage applications and drawdowns. The Central Bank has made it clear to all regulated firms that they must take a consumer-focused approach and to act in their customer's best interests at all times, including during the Covid-19 pandemic, and that it continues to monitor this situation very closely to ensure that lenders are complying with this requirement.  

Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Indeed, the three main retail banks assured the Tánaiste, Leo Varadkar T.D., Minister McGrath and me at meetings on the 15th and 16th of July that they are considering applications and mortgage drawdowns from customers on the Temporary Wage Subsidy Scheme on a case by case basis. The BPFI has published a Covid-19 support information 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.

However, within the parameters of the regulatory framework governing the provision of mortgages, the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity and it is not appropriate or possible for me to instruct lenders in that regard.  Also it may be the case that a loan offer from a lender 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. In such cases, the decision to withdraw or vary the offer is also a commercial and contractual decision for the lender.

Furthermore if a mortgage applicant has paid a deposit for a property but is then refused the mortgage drawdown to complete the transaction, this is covered under the sale or conveyancing of property and is a matter that is generally governed by property and contract law and as Minister for Finance I do not have a primary policy function for the law relating to the conveyancing of property or in relation to the operation of private contracts.

However, as the conveyance of property is usually a significant transaction it is likely that both the purchaser and seller of a property will employ legal expertise to advise, assist and protect the interests of their clients on the various legal, financial and other associated requirements at each stage of the property transaction. 

Regarding the regulations governing mortgage credit, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016, which transposed the Mortgage Credit Directive into Irish law, require lenders to 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 information on the consumer’s income and expenses and other financial and economic circumstances which is necessary, sufficient and proportionate.  The Regulations 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.  In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders.  Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower and in this regard I welcome the recent statement from the pillar banks that they will assess mortgage applications from people in receipt of the temporary wage subsidy scheme on a case by case basis.  

However, if a consumer if not satisfied with the way a regulated entity is dealing with his/her mortgage application or drawdown then, under the provisions of the Central Bank Consumer Protection Code, s/he can make a complaint to the lender.  If the consumer is still unhappy with the position following the outcome of the internal complaints process, then s/he can make a complaint to the Financial Services and Pensions Ombudsman (FSPO).  Clear information on how to make a complaint to the FSPO may be found at this link:.