A Fianna Fáil Bill to protect the IBRC mortgage holders whose mortgages are being sold is to be pressed in the Dáil tonight and tomorrow during private members’ time.
If enacted, the Protection of Residential Mortgage Account Holders Bill would ensure that any mortgage holder whose mortgage is sold to an unregulated vulture fund would continue to enjoy the protections of the Code of Conduct on Mortgage Arrears and access to the Financial Services Ombudsman (FSO).
The party’s Spokesperson on Finance Michael McGrath commented, “Last week’s appearance before the Joint Oireachtas Finance Committee by the Special Liquidator KPMG shed new light on the standing of a commitment of ‘voluntary compliance’ with the Code of Conduct on Mortgage Arrears by any potential purchaser of the IBRC mortgages. In response to questions I raised with the liquidator I was told that the commitment would not be written down and it would have “zero legal standing.”
“We know that the IBRC mortgages are being sold at a significant discount to their book value. With 99% of the mortgages on a standard variable rate the loan book is a very attractive prospect to potential investors. Families understandably fear that whoever buys their loans will aim to exploit every opportunity to maximise the profit that they make.
“While the CCMA is imperfect it does offer vital protection in a number of areas. These include ensuring that the lender has appropriately trained staff and clear procedures for dealing with customers in arrears. It also places restrictions on the lender imposing surcharge interest unless the borrower is not co-operating and includes a stay on the initiation of an action for repossession for up to 8 months.
“For the Minister to say that no judge would grant an order for repossession to an institution that had not followed the Code is entirely disingenuous. Before a case would get to that stage a borrower would face considerable stress and anxiety. Applying the Code is not something that should happen at the end of the process but instead it should happen at every stage.
“There is also the potential for the situation to arise in respect of other institutions. Danske Bank, ACC and Bank of Scotland are in the process of closing their personal banking businesses in Ireland. This means that the mortgages they sold could end up in the hands of unregulated third parties who are not subject to Central Bank supervision. Even AIB or Bank of Ireland could decide to sell a portion of their home loan books.
“I look forward to a responsible and constructive debate on the Bill and I would call on the government to accept this Bill as a genuine attempt to solve a serious problem facing the IBRC mortgage holders now and potentially thousands of other mortgage holders down the line.”