Brendan Burgess
Founder
- Messages
- 52,160
The Central Bank published the [broken link removed]this morning.
It is very disappointing
Good bits
1) The lenders must now outline, in general terms, of the lender’s criteria for assessing requests for alternative repayment arrangements;
This is very important. Up to now borrowers and their advisors did not know what the criteria lenders had for the different ARAs. So one simply did not know if one might be offered a split mortgage. The lenders must now publish their criteria and this is something I and many others called for.
2) The moratorium is 8 months from the beginning of arrears or 3 months after they cease cooperating.
Again, this is something I called for. A borrower who is engaging with the bank has no need for a moratorium as they can be in the MARP for years and banks don't want to repossess family homes anyway.
The existing mortatorium of 12 months was in fact much, much longer as the clock stopped during most of the MARP.
However, the moratorium was having unintended consquenes. Many borrowers were burying their head in the sand as they knew the bank could do very little for 12 months. Reducing it will force people to address their problems earlier.
Many borrowers were using the moratorium to give the banks the runaround, so its reduction is welcome.
3) The restrictions on mortgage lenders calling borrowers in arrears have been lifted
Again, I think that this is a good thing. Credit Card companies and Credit Unions were not subject to any such restrictions, so borrowers were paying them first as they were causing the most hassle.
For most people, the easing of these restrictions will make no difference whatsoever. They took calls and they engaged with their lender.
Bad bits
4) The protection for trackers is gone. I just don't understand this. It would have been so simple to allow the margin to be increased in exchange for debt write-off.
I hate conspiracy theories, but I suspect that the prudential guys in the Central Bank just told their consumer colleagues to get rid of it.
5) Still no definition of what an unsustainable mortgage is. So the banks can tell people "Look your mortgage is unsustainable and the borrower can do nothing about it.
The submissions I made which were ignored
My full submission is
It is very disappointing
Good bits
1) The lenders must now outline, in general terms, of the lender’s criteria for assessing requests for alternative repayment arrangements;
This is very important. Up to now borrowers and their advisors did not know what the criteria lenders had for the different ARAs. So one simply did not know if one might be offered a split mortgage. The lenders must now publish their criteria and this is something I and many others called for.
2) The moratorium is 8 months from the beginning of arrears or 3 months after they cease cooperating.
Again, this is something I called for. A borrower who is engaging with the bank has no need for a moratorium as they can be in the MARP for years and banks don't want to repossess family homes anyway.
The existing mortatorium of 12 months was in fact much, much longer as the clock stopped during most of the MARP.
However, the moratorium was having unintended consquenes. Many borrowers were burying their head in the sand as they knew the bank could do very little for 12 months. Reducing it will force people to address their problems earlier.
Many borrowers were using the moratorium to give the banks the runaround, so its reduction is welcome.
3) The restrictions on mortgage lenders calling borrowers in arrears have been lifted
Again, I think that this is a good thing. Credit Card companies and Credit Unions were not subject to any such restrictions, so borrowers were paying them first as they were causing the most hassle.
For most people, the easing of these restrictions will make no difference whatsoever. They took calls and they engaged with their lender.
Bad bits
4) The protection for trackers is gone. I just don't understand this. It would have been so simple to allow the margin to be increased in exchange for debt write-off.
I hate conspiracy theories, but I suspect that the prudential guys in the Central Bank just told their consumer colleagues to get rid of it.
5) Still no definition of what an unsustainable mortgage is. So the banks can tell people "Look your mortgage is unsustainable and the borrower can do nothing about it.
The submissions I made which were ignored
My full submission is
- [FONT="]The MARP should not be a requirement where the lender and borrower can agree a short-term solution and where there are no arrears[/FONT]
- The Central Bank must define or describe what is meant by an unsustainable mortgage
- [FONT="]Lenders should not be required to notify the borrower of the risk of repossession so early in the process
[/FONT] - [FONT="]Where joint mortgage holders have split up, and only one borrower is cooperating, that borrower should be facilitated.
[/FONT] - The scope of the Code should be extended to include accidental landlords