Fianna Fáil has today published the party’s submission to the Central Bank on the Review of the Code of Conduct on Mortgage Arrears and has called on the Central Bank not to implement some of the proposed changes which the party believes will alter the balance of power in favour of the banks at the expense of distressed borrowers.
Speaking on the publication of the party’s submission, Spokesperson on Finance Michael McGrath stated: “I welcome the fact that the Central Bank has received 230 submissions on the proposed changes to the Code of Conduct on Mortgage Arrears and I would urge the Central Bank to consider carefully the concerns that have been expressed by a wide range of interested parties.
“We have serious concerns about some of the proposed changes to the code. In particular, the proposal that a borrower deemed by the bank to be not co-operating will lose the protection of the code and could be subject to repossession proceedings within 30 days; this is open to abuse. The removal of any limit on the number of contacts a bank can make with a borrower will greatly add to the stress being experienced by borrowers in arrears and is unlikely to lead to better mortgage resolution outcomes.
“We believe the Central Bank’s proposal to remove the veil of protection from a customer’s tracker mortgage rate sets a dangerous precedent and gives the banks a tool they have long been seeking. We do not see why it is necessary for a customer to lose their tracker rate as part of any restructuring arrangement. In fact, by definition, distressed borrowers are the ones most in need of a tracker mortgage rate.
“Fianna Fáil has proposed a fundamentally different approach to resolving the escalating mortgage arrears crisis. We believe that a Mortgage Resolution Office, sitting within the new Insolvency Service, should have the power to impose a binding resolution to a borrower’s mortgage difficulties. Instead, the government and the Central Bank seem determined to give more and more power to the banks to the detriment of the mortgage holder.”