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New regulations for homeowners in arrears

New rules for mortgage lenders have been proposed to help struggling homeowners.

THE CENTRAL Bank and Financial Regulator have published a report proposing methods to help people who are experiencing financial problems during the recession.

Read the report.

The paper outlines possible new regulations for dealing with those who are in mortgage arrears.

Under the proposed rules:

  • Banks and building societies would (still) have to wait 12 months before applying for a home repossession, if the person in arrears is cooperating
  • If homeowners sign up to a new repayment arrangement, the 12-month period would start only when they fall into arrears under the new scheme
  • Information must be provided to borrowers in clear English when they go into arrears
  • Lenders would have to wait for the outcome of any complaint or appeals process before applying for repossession of a home
  • Lenders would be required to explore “all viable options” and alternative repayment measures with homeowner
  • Lenders would be stopped from forcing people to switch from a tracker mortgage to another type of mortgage
  • Lenders would be required to set up an appeals process for homeowners
  • Lenders would be required to have in place a Mortgage Arrears Resolution Process (MARP) as a framework for handling arrears and pre-arrears cases

The Mortgage Arrears and Personal Debt Expert Group, who put together the proposals, are seeking feedback from any interested parties. It asks that all suggestions be made by 3 September.

Find more information on the Financial Regulator‘s website, or email suggestions (which you would not mind being published publicly) to: code@financialregulator.ie.

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