Peadar Tóibín (Meath West, Aontú)
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266. To ask the Minister for Finance if he is satisfied with the practices of the financial vulture fund companies in terms of the crisis affecting mortgage holders. [3363/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Central Bank has put in place a range of measures in order to protect consumers who take out or have a mortgage. This consumer protection framework seeks to ensure that lenders are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties.

This consumer protection framework includes the various Central Bank statutory Codes of Conduct such as the Consumer Protection Code 2012 (Code) and the Code of Conduct on Mortgage Arrears 2013 (CCMA) and all regulated entities, including banks, retail credit firms and credit servicing firms, are required to comply with the provisions of these codes in their dealings with consumers.

The CCMA provides specific protections for borrowers in arrears or facing a prospect of arrears on a loan secured on a primary residence. In particular, a regulated entity must pro-actively encourage borrowers to engage with it about financial difficulties which may prevent the borrower from meeting his/her mortgage repayments.

Also, where a borrower is experiencing repayment difficulty, a regulated entity must explore all of the options for alternative repayment arrangements (ARAs) offered by the entity to determine if a more suitable and sustainable repayment option is available based on the borrower’s individual circumstances.

If a borrower is not satisfied with the options proposed, or if the regulated entity declines to offer an ARA, an appeals mechanism is provided for in the CCMA. In addition, a regulated entity must review an ARA at intervals that are appropriate to the type and duration of the arrangement, including at least 30 calendar days in advance of an ARA coming to an end.

In relation to the mortgage interest rates charged by different categories of Central Bank regulated entity it is, subject to the terms of the particular contract, a commercial matter for individual mortgage creditors to set their own lending rates.

However, the Code, inter alia, requires that all regulated entities explain to borrowers how their variable interest rates have been set including in the event of an increase. Where a borrower is facing an increase in the rate of their mortgage, they can seek to move to another product at their existing lender or switch to a different lender, noting this will be subject to the lending criteria, terms and conditions of the lender to whom they apply.

In this respect, the Central Bank has advised that it has engaged with lenders to ensure the operational capacity is in place to facilitate people to switch at a system wide level.

The Central Bank also advises that the protection of mortgage loan borrowers, including those in arrears, is a key priority and that it will continue to supervise compliance by regulated entities with the CCMA and will investigate any issues that arise, including patterns of behaviour which suggest that the CCMA process is not being followed.