Public given rare opportunity to shape mortgage arrears policy

19 August 2010

The Financial Regulator is currently revising its Code of Conduct on Mortgage Arrears. As part of a consultation, it is offering the public a rare chance to contribute its views on how financial institutions should handle mortgage arrears in future.

FLAC welcomes this chance to hear the voice of borrowers who are most directly affected by the mortgage arrears crisis. "The Regulator has asked for input from interested parties - there is no-one more interested than the members of Irish society in how mortgage arrears problems are handled," said Noeline Blackwell, FLAC Director General.

To facilitate people in giving these vital opinions, FLAC is inviting the public to use its website to answer the questions posed by the Regulator's consultation paper. In addition, FLAC has developed some other questions which it feels will augment the consultation process, such as whether there is adequate support for homeowners in trouble or whether the Code should be legally enforceable.

FLAC will then collate all responses received by 1 September and present them to the Financial Regulator by the closing date of 3 September.

"FLAC hears every day through its telephone information line and advice centres of the distress and despair felt by people in difficulty with mortgage arrears as well as other forms of debt. FLAC is seeking a holistic approach to debt which will take into account the totality of a person's debt situation," said Ms Blackwell.

FLAC urges the public - whether affected by mortgage arrears or not - to read the Financial Regulator's proposals and comment on them. "It is vitally important that the Regulator be made aware of how the issue of mortgage arrears is affecting homeowners across the country. By making submissions, the public can, through FLAC or individually, inform the Regulator, in the hope that it will result in a more useful, effective and practical Code of Conduct," concluded Ms Blackwell.


Editors' notes:

  1. FLAC (Free Legal Advice Centres) is an independent human rights organisation which works to promote equal access to justice for all.
  2. Financial Regulator's consultation paper is entitled "Review of Code of Conduct on Mortgage Arrears, Consultation Paper CP45" and was published on Friday 13 August 2010.
  3. The proposals outline a structured process for lenders and borrowers to follow when dealing with mortgage arrears. Under the revised code, lenders will be required to communicate clearly with borrowers as soon as arrears arise and explore all viable options. They must also set up a Mortgage Arrears Resolution Process (MARP) and designate at least one staff member in every branch to deal with arrears. For the first time, lenders will also have to listen to and address the concerns of customers who anticipate entering into arrears. The new Code will require lenders to set up an appeals process for borrowers who are unhappy with the lender's decision. If the proposals are adopted, lenders will have to defer court proceedings for 12 months from the time of first arrears or from the time a new payment arrangement broke down.
  4. You can read more on this campaign on the dedicated page.
  5. FLAC recommended a complete overhaul of debt enforcement procedures in Ireland and the introduction of debt settlement legislation in a major report in 2003. That was followed in July 2009 by a second in-depth report which explored the debtor's perspective on the enforcement process. The organisation called for a greater range of remedies to assist those who are over-indebted.