Banks comply with mortgage code

Irish lenders are willing to work with consumers to assist them in addressing their mortgage arrears problems, a report by the Central Bank has found.

Five of the country's main lenders were inspected by the Central Bank to assess their compliance with certain provisions of the mortgage arrears code, the Code of Conduct on Mortgage Arrears (CCMA).

The inspection, which was carried out this year, found that lenders were found to be willing to enter into alternative mortgage repayment arrangements with consumers over various time periods.

Mortgage lenders were also found to be in compliance with the required timeframes before applying to the courts to commence enforcement of any legal action on repossession of a property, while customers were notified when the mortgage lender commenced the enforcement of any legal action on repossession.

While mortgage lenders were found to have endeavoured to obtain income and expenditure details from consumers and explored alternative repayment measures with them, the Central Bank found some shortcomings regarding the records maintained by mortgage lenders about advising consumers to take independent advice on arrangements and referrals to MABS, where appropriate.

Commenting on the inspection findings Bernard Sheridan, Assistant Director General, Consumer Protection, said, 'The inspection showed that lenders are willing to work with borrowers facing mortgage difficulties. However, it is important that consumers engage with their lenders at an early stage if they are concerned about meeting their mortgage repayments.'

The statutory CCMA was first introduced in February 2009 to provide protection to consumers who are in mortgage arrears.

An amendment was introduced to the CCMA in February 2010 which extended the time lenders must wait before applying to the courts to commence enforcement of any legal action on repossession of a borrower’s primary residence from six months to twelve months.

The CCMA applies to all regulated mortgage lenders, except credit unions.