Banks Seek More Powers Over Mortgage Arrears

Banks may be given greater powers to contact customers who are in mortgage difficulty, under proposals being considered by the Central Bank.

Under the existing code of conduct set out by the Central Bank, lenders are forbidden from contacting customers who are in arrears more than three times in one calendar month.

Central Bank is seeking to review this stipulation, amid concern that some customers are not addressing their arrears problem.

Speaking in the Dáil yesterday evening in response to a private member’s motion tabled by Fianna Fáil, Minister of State Brian Hayes said the code of conduct was “an important framework that governs the relationship between a borrower and mortgage lender who is experiencing difficulty and provides a number of protections to the borrower.”

According to the latest figures from the Central Bank, almost 71,000 mortgages – around 9 per cent of total home loans – were in arrears of 90 days or more at the end of December. The revised code of conduct on mortgage arrears came into force on January 1st, 2011.

Rachel Doyle, chief operating officer of PIBA, the professional insurance brokers’ association, said any change to the rules governing contact between banks and mortgage customers would be a cause for concern.

“While we would advise people who find themselves in mortgage difficulty to engage with their banks and not to put their heads in the sand, you can not put people in a situation where they can constantly being hounded by banks.”

Last month the Central Bank said that mortgage arrears would be one of a number of issues the bank would examine this year as part of a “series of themed reviews and inspections” planned for 2012.