REACTION:THE OFFICE of the Financial Regulator says it will act swiftly to address the immediate priorities outlined in the advisory report on mortgage arrears.
Head of financial regulation, Matthew Elderfield, said all financial institutions should ensure that any hardship endured by financially stressed homeowners was not prolonged any further.
“I call on lenders to implement now the recommendations to improve the position of those in arrears ahead of formal action by us. I would also like to encourage consumers who feel they are in financial distress to contact their lender at an early stage before an arrears problem gets out of hand. Lenders must treat you fairly.”
A consultation process will be published next month proposing new regulations to address the immediate priorities on stressed loans by amending the statutory code of conduct on mortgage arrears. The Consumer Credit Act will also be published.
In order to address recommendations that lenders should not impose charges on borrowers who are engaging with them, the regulator has indicated that it will also be engaging with each lender on those changes which are applied under the Consumer Credit Act. “Prior to implementation of these requirements on a statutory footing, firms should move to adopt the measures set out in the report,” Mr Elderfield said.
The Irish Banking Federation (IBF), which represents 80 financial institutions in the State, also backed the measures.
“The new approach brings additional clarity and confidence for homeowners with mortgage arrears and is a necessary development in the current uncertain environment,” the federation said.
The social housing charity Respond gave a cautious welcome to the recommendations, but said more needed to be done. It said some form of debt forgiveness for those facing repossession needed to be examined.
“With 70,000 families struggling to repay a mortgage each month and an estimated 350,000 likely to be in negative equity by the end of the year, broader structural changes are required,” said spokeswoman Aoife Walsh.