Fianna Fáil Finance spokesperson Michael McGrath has said he is cautiously welcoming the announcement that Pepper Asset Management is to begin offering new mortgages in the Irish market.
Pepper already has a presence as they bought the loan book of sub-prime lender GE Money and administer loans on behalf of a number of other firms.
Deputy McGrath stated, “Any injection of competition in to the mortgage market is a positive development but we should not be popping any champagne corks at this news. It appears they will be somewhat of a niche player targeting only the larger urban areas.
“It is also noteworthy that Pepper has been one of the more aggressive firms in pursuing repossessions cases against borrowers who have fallen in to arrears.
“In this context it is important that we have a strengthened Code of Conduct on Mortgage Arrears. As it stands there is a serious gap in current legislation whereby a bank can get a repossession order even if it has failed to comply with the Conduct on Mortgage Arrears. I have published a bill which will prevent this happening. It is alos our intention that banks would be significantly penalised for breaches of the CCMA.
“I also believe there is an ongoing need to legislate to deal with excessive standard variable rates. Fianna Fáil will legislate for to give the Central Bank responsibility for monitoring the level of competition in the mortgage market and the fairness of rates charged. This would act as a strong deterrent to banks from charging excessive rates and would only necessitate Central Bank action where the evidence points to a clear market failure. Our legislation would empower the Central Bank with a range of tools to influence the standard variable rates charged,” concluded Deputy McGrath.