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“This protocol is designed to provide further support to keep people in their homes. These principles are intended to enhance implementation of institutions’ Mortgage Arrears Resolution Strategies (MARS) and their Mortgage Arrears Resolution Processes (MARP) arising under the Code of Conduct on Mortgage Arrears (CCMA), and to assist borrowers in addressing their overall financial difficulty where they have debt with multiple lenders.”

PROTOCOL ON UNSECURED CREDIT PRINCIPLES

This protocol is designed to provide further support to keep people in their homes. These principles are intended to enhance implementation of institutions’ Mortgage Arrears Resolution Strategies (MARS) and their Mortgage Arrears Resolution Processes (MARP) arising under the Code of Conduct on Mortgage Arrears (CCMA), and to assist borrowers in addressing their overall financial difficulty where they have debt with multiple lenders.

It builds on the view that with the benefit of MARS and existing solutions, there is a full range of options to help customers remain in their homes on a suitable basis.

Creditors subscribing to the protocol will adhere to the following principles with respect to mortgages secured on customers’ family homes. The protocol will apply to those customers who are experiencing significant financial difficulty after their income and expenditure has been reviewed, who also have unsecured debt with multiple lenders, who have no identifiable means to materially improve their financial situation and who are co-operating with their mortgage lender.

• 1. The mortgage debt will be prioritised and serviced ahead of other debt.
• 2. The customer’s consent will be obtained to permit the creditors to liaise with each other in order to arrive at appropriate arrangements.
• 3. The customer’s financial position will be fully assessed based on the information provided in the
  Standard Financial Statement (SFS) obtained through MARP.
• 4. A mortgage payment will be made in full where the customer can demonstrate their ability to make a
  payment to unsecured creditors. To support a payment to unsecured creditors, the mortgage
  payment may be reduced for a period of up to 5 years as part of a sustainable long term treatment.
• 5. Payments made towards all unsecured debt will be apportioned on a pro-rata basis on the balances
  outstanding.
• 6. The resulting arrangements will be reviewed after 36 months by the mortgage lender, with a view to reflecting a material change in the customer’s circumstances.
• 7. Subscribing creditors will discharge the customer from residual unsecured debt at the expiry of the
  agreed period of up to five years provided that the customer has adhered to the terms of their
  arrangement i.e. met their agreed mortgage and unsecured repayments, and any terms and conditions of their loan agreements.
• 8. Appropriate credit history reporting codes will be agreed with respect to customers availing of
  arrangements under the protocol.
• 9. All parties to any arrangement arising under the protocol are expected to act in good faith.

In order for an institution to subscribe to the protocol they will confirm same to IBF by letter. In order for an institution to exit the protocol, they will confirm same to IBF by letter, setting out at least one month’s notice in that letter of their withdrawal date from the protocol. No new cases will be accepted by them under the protocol after the withdrawal date. Existing cases will continue until expiry of the arrangements adhered to under the protocol.

Source: Irish Banking Federation

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Representatives from the Department of Finance, Financial Services Ombudsman’s Office and senior banking officials met in Dublin last week to discuss the complex issue of Ireland’s mortgage arrears crisis.

The attendees of the think tank debated a wide range of aspects including the eagerly anticipated establishment day of the Personal Insolvency legislation. The strong fear of contagion remains a barrier to debt resolution, with short to medium term forbearance measures being favoured by banks in avoidance of the moral hazard of wide spread debt forgiveness. Furthermore the present lacuna in the law has meant that many lenders have simply put a significant proportion of loans ‘on ice’, whilst they await a correcting amendment to the act.

Once this road block is cleared Mortgage lenders will be ready to respond immediately to enforce their security on loans. This uplift in activity is prompted by calls from the Central bank to rapidly implement mortgage arrears resolution strategies, never mind the threat of increased capital adequacy requirements and positive impact security enforcements have on loan portfolio disposals.

Home owners have been lulled in to a false sense of security regarding the validity of repossessions are going to be facing a considerable change of pace over the coming months.

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Weston & Wellington will be key contributors to the industry roundtable on Ireland’s Mortgage Arrears Crisis.

Weston and Wellington are actively administering over €500m of real estate loans on behalf of borrowers and will be reporting on our experiences in negotiating loan modifications and securing settlements.

Commenting on the situation, Martina Whyte, Mortgage Director stated “there is a clear need for a bi lateral agreement across mortgage lenders on the treatment of residual debts following asset sales at loss and industry collaboration regarding the transparent reporting of total indebtedness”.

Rockstead are hosting the Roundtable which will see senior lending executives and policy makers contribute to the think tank.

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Permanent TSB has announced plans to boost its consumer lending to €450m in 2013. The re-entry of Permanent TSB into the market rein force’s indications that mortgage lending is on the rise and that property prices have stabilised.

PTSB said it has €350m available to lend for new mortgages, as well as €100m for car and other personal loans, plus €5m for new credit card finance.

Permanent TSB’s new home loans are being offered with an attractive introductory variable rate for new customers of 3.99pc. This rises to 4.33pc after a year, which is the average variable rate charged in the market. The new rates are less than many current home owners are paying, at least initially.

A deposit of 10% of the value of the property is required. For example the average house price in Ireland is €171,000, meaning that the borrower would need to raise a deposit of €17,100.

PTSB are also part of the NAMA deferred payment plan, where not all of the purchase price will have to be paid if the property falls in value over five years.

The team at Home Brokers are happy to help you source your new mortgage, please get in touch with us today on 01 8280008 or email or apply on line by clicking here.

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