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Tuesday 3 October 2023 Dublin: 11°C
Sam Boal/Photocall Ireland
# Mortgages
Lenders following arrears guidelines from Keane Report, says Central Bank
The Central Bank says commercial banks are bringing forward new proposals to assist people in mortgage difficulty.

THE CENTRAL BANK has said Ireland’s commercial lenders are in the process of preparing new ‘loan modification techniques’, in line with the government-commissioned Keane Report, in order to assist struggling mortgage holders.

In a statement this afternoon the bank said it had begun receiving information from individual banks about their resolution strategies, ahead of October’s deadline for bringing the new systems into operation.

“The banks have committed to a step change in their operations and have provided detailed plans to enhance their handling of arrears cases. The Central Bank will continue to monitor their implementation closely,” it said.

“The lenders provided details of their menu of forbearance and loan modification techniques. These are broadly in line with the recommendations of the Keane report, including mortgage to rent and different variations of split mortgages.

It added that individual lenders would begin running their programmes on a pilot basis ‘shortly’, in order to get a more complete picture of the impact that the programmes would have on their capital positions.

The most prominent lenders were examining their loan books to identify which loans could be subject to the new procedures, it added, though any predictions were ”still subject to considerable uncertainty and modelling assumptions”.

In some cases, banks will need to make ‘significant improvement’ in their operational abilities, a move which may mean some staff restructuring or recruitment within the main lenders.

The Keane Report, published last October, proposed a number of measures including allowing people in negative equity to transfer it to another home, and allowing people whose homes had been repossessed to continue renting them from their lender.

The report was criticised by groups including New Beginning, however, as being “a banker’s solution in the bankers’ interest”.

Column: Stephen Donnelly: The Keane report has consequences for borrowers – but not for banks

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