The Central Bank of Ireland instituted different measures to protect borrowers if they are unable to repay their mortgage. The Central Bank defines being in mortgage arrears as a situation in which borrowers have missed a mortgage repayment or think that they will miss a repayment in the near future.
Central Bank’s Code of Conduct on Mortgage Arrears
The Central Bank of Ireland’s Code of Conduct on Mortgage Arrears (CCMA) is specifically designed to provide assistance to borrowers who are currently facing mortgage arrears and those who are struggling to make the mortgage repayments. The CCMA was created to provide protection to you, the borrower, and it has legal implications, as lenders are legally required to comply with the CCMA. Furthermore, the CCMA is designed to require lenders to help you “get back on track” in terms of your mortgage repayments.
The CCMA requires lenders to do two different things. First, lenders must have a dedicated, specialized, and trained staff as part of their Arrears Support Unit. The Arrears Support Unit will manage your case and meet with you in private to discuss your situation and methods you can use to get back on track with your mortgage loan. Second, lenders must follow the Mortgage Arrears Resolution Process (MARP) which outlines how they must treat and assist you with your situation.
Mortgage Arrears Resolution Process
The MARP has four different components: communication, financial information, assessment, and resolution. The communication component determines how the lender must communicate with you. For example, they must contact the borrower in a timely, clear manner regarding their mortgage arrears.
The financial information component requires that the lender gets information from the borrower regarding their personal financial situation. This information is to be used by the lender to gain a better understanding of the borrower’s finances so that they can properly assess the problem.
The assessment component involves the lender assessing the borrower’s case. During this stage, the lender will determine if they can offer a proper alternative to the repayment terms. Because each situation is different, the lender must take the borrower’s finances into account before they can appropriately assess their situation.
Lastly, the resolution component occurs when the lender offers the borrower a suitable, alternative repayment agreement or chooses not to. It is important to note that if the lender decides that they cannot offer the borrower an alternative, they must be able to explain why.
With the CCMA and MARP, the Central Bank of Ireland works to protect borrowers who are currently facing or who are on the brink of facing mortgage arrears. With these measures, the Central Bank requires that lenders work with borrowers to address the situation in the hopes that an alternative agreement can be reached.