Wednesday, 6 October 2021
Department of Finance
23. To ask the Minister for Finance the supports in place for a family whose family home has been sold on by their mortgage provider to a vulture fund and in cases in which that same mortgage provider had blocked the family from taking up the mortgage to rent scheme; if an appeal mechanism is in place for the family; and if he will make a statement on the matter. [48591/21]
The Central Bank Act 1997 (as amended) provides, inter alia, that any entity (unless it is otherwise authorised to provide credit) carrying out credit servicing activities (which includes the holding of legal title to credit, or managing or administering a credit agreement) requires authorisation by the Central Bank of Ireland as a 'credit servicing firm'. Accordingly, such firms must comply with all relevant requirements of financial services legislation, including the Central Bank’s Consumer Protection Code 2012, Code of Conduct for Mortgage Arrears 2013 (CCMA), Code of Conduct for Business Lending to Small & Medium Enterprises 2012 and Fitness and Probity Standards (including minimum competency requirements).
For borrowers who are experiencing difficulty with a mortgage which is secured on a primary home, the CCMA requires regulated entities, including credit servicing firms, to have a fair and transparent process for dealing with borrowers in or facing mortgage arrears. The mortgage arrears resolution process that is contained in the CCMA sets out the steps a regulated entity must follow in respect of communication with the borrower, gathering of financial information, assessment of the borrower's situation and consideration of resolution options. In particular, in relation to a 'co-operating borrower', provision 39 of the CCMA provides that, in order to determine options for alternative arrangements for each particular case, a regulated entity must explore all of the options for alternative repayment arrangements offered by that entity. Provision 45 further provides that if a regulated entity does not offer a borrower an alternative repayment arrangement, for example, where it is concluded that the mortgage is not sustainable and an alternative repayment arrangement is unlikely to be appropriate, the lender must provide the reasons to the borrower. In these circumstances, the lender must inform the borrower of other options available to the borrower and the implications of each option for the borrower; and his/her mortgage loan account. These options could include mortgage to rent, voluntary surrender, trading down, or voluntary sale.
Provision 49 of the CCMA also requires that each regulated entity must have an appeals process to enable a borrower to appeal in relation to a decision of the regulated entity including:
- where an alternative repayment arrangement is offered by a regulated entity and the borrower is not willing to enter into the alternative repayment arrangement;
- where a regulated entity declines to offer an alternative repayment arrangement to a borrower;
- where a regulated entity classifies a borrower as 'not co-operating'.
More generally, a consumer has a right to make a complaint to a regulated financial services provider if they are not satisfied with the service they have received. Should they remain not satisfied with the final response from the regulated financial services provider in question they then have a right to make a complaint to the Financial Services and Pensions Ombudsman (‘FSPO’).
Final decisions on eligibility for the mortgage to rent scheme, however, will rest with the relevant local authority.