I secured a large mortgage to buy my house at the peak of the market. Unfortunately, I lost my job and I am unable to meet my large monthly mortgage payments. Are banks obliged to follow any particular rules in dealing with my situation?
Under the Central Bank’s Code of Conduct on Mortgage Arrears, all regulated mortgage lenders are obliged to follow a five step process called Mortgage Arrears Resolution Process (MARP ).
Communication: The lending institution (lender ) must inform a borrower in writing if their mortgage account is in arrears for more than 31 days. The letter must set out full details of the missed payment(s ) and the total amount in arrears. The borrower must also be advised of the importance of co-operating with the lender.
Financial information: The lender must provide the borrower with a Standard Financial Statement for completion. This will enable the lender to assess the true financial position of the borrower so as to identify the best course of action to take. The lender must advise the borrower of the availability of independent advice (eg from MABS ) to assist in completing the Standard Financial Statement.
Assessment: The lender must assess the completed Standard Financial Statement and base its assessment of the borrower’s case on his full circumstances including personal circumstances; overall indebtedness; current repayment capacity and previous payment history.
Resolution: The lender must explore all options for alternative repayment arrangements with the borrower. (I will discuss examples of such arrangements in next week’s article ). The lender may not require a borrower to change from an existing tracker mortgage to another mortgage type. Any alternative repayment arrangement must be clearly explained in writing to the borrower.
Appeal: The lender must inform the borrower of their right to appeal any decision the lender may make regarding their situation to the lender’s appeal board.
This column is prepared by Dolores Gacquin, solicitor. Byrne Carolan Cunningham have offices in Athlone, Moate, and Lanesborough.
A person should always contact their solicitor to obtain legal advice specific to their own situation. The above column contains general information and cannot be relied upon as legal advice.