Mortgage lenders refund 3,000 overcharged account holders

MORTGAGE LENDERS have been forced to refund more than 3,000 account holders who were wrongly overcharged following an investigation by the Central Bank.

An inspection into whether lenders were complying with the revised Code of Conduct on Mortgage Arrears (CCMA) found that 3,100 mortgage holders were overcharged by almost €70,000. The accounts have since been fully refunded.

The Central Bank said that, as a result of its inspection, it was extending its list of prohibited charges to provide additional protection to mortgage customers in arrears.

The revised conduct code, which came into effect at the beginning of the year, enhances protection afforded to people experiencing difficulties making mortgage payments. Under the new code banks can no longer impose penalties on customers in mortgage arrears; force them to surrender tracker mortgages; or bombard them with letters and calls demanding repayment.

Mortgage holders struggling to meet repayments must also be offered significant levels of protection once they co-operate with the new arrears-resolution process.

The Central Bank found that two mortgage lenders were in full compliance with the newly-revised code, while four were not due to issues such as system errors and inadequate monitoring processes.

It said it was satisfied that lenders were addressing the compliance issues identified during the inspection, which took place in March and April.

“This inspection demonstrates that while the mortgage lenders inspected had taken steps to be in compliance with the charging requirement of the CCMA further effort was required by some of these lenders to achieve full compliance,” said director of consumer protection Bernard Sheridan.

“While the refunded amounts may be small they are significant to those mortgage customers who are in an arrears situation and for whom every cent counts.”

Almost 50,000 residential mortgages were in arrears at the end of March, equivalent to 6.3 per cent of all private residential mortgages.