Proposed New Requirements to Protect People in Mortgage Arrears   

Press Release 13 August 2010

Recommendations of Mortgage Arrears and Personal Debt Expert Group to be incorporated into Statutory Mortgage Arrears Code

Tá an preasráiteas seo ar fáil as gaeilge chomh maith 

The Central Bank and Financial Regulator today published a consultation paper on the statutory Code of Conduct on Mortgage Arrears (CCMA), outlining proposed new regulations for dealing with those in mortgage arrears.  The Interim Report of the Mortgage Arrears and Personal Debt Expert Group, published in July, set out a recommended process for dealing with mortgage arrears and makes specific recommendations in relation to the CCMA.  The consultation paper has taken the recommendations into account, along with other issues that have arisen since its implementation, to assist borrowers with arrears on the mortgage on their home.

The proposed new statutory requirements for mortgage lenders under the Code include:

  • Lenders must have in place a Mortgage Arrears Resolution Process (MARP) as a framework for handling arrears and pre-arrears cases.
  • Specific information must be provided to borrowers in a clear customer friendly manner when they go into arrears. A Standard Financial Statement must be used by all lenders to obtain financial information from borrowers in arrears or at risk of going into arrears. Lenders must assess each case on its individual merits and must base their assessment on the completed Standard Financial Statement.
  • Lenders must engage with borrowers who are at risk of going into arrears.
  • Lenders must explore all viable options with borrowers and must examine alternative repayment measures.
  • Borrowers must not be required to change from a tracker mortgage to another mortgage type.
  • Where borrowers are co-operating reasonably and honestly with lenders, lenders must wait at least twelve months before applying to the courts to commence enforcement of any legal action on repossession of a primary residence. The twelve-month period commences:

                - when the arrears first arose, if a revised repayment arrangement has not been agreed;or

                - when the borrower ceases to adhere to the terms of a revised repayment arrangement and no further arrangements are being entered into.

  • Lenders must establish a centralised and dedicated Arrears Support Unit and draw up and implement procedures for dealing with borrowers in arrears or at risk of arrears. Training must also be provided for staff dealing with borrowers experiencing arrears.
  • Lenders must establish an appeals process to consider any appeals submitted by borrowers.
  • An information booklet must be made available to borrowers providing details of a lenders MARP process. The booklet must be drafted in plain English and in a clear and consumer friendly manner.

The Consultation also seeks views on specific issues including an appeals process, limiting the level of unsolicited communication with those in arrears; establishing an appropriate definition of what constitutes arrears; and defining a primary residence or describing what type of property should be protected under the CCMA.

The CCMA was first introduced on 27 February 2009 to provide additional protections to consumers who are in mortgage arrears and to help ensure that all genuine cases are handled positively and sympathetically by lenders. An amendment was introduced to the CCMA in February 2010 which extended the time lenders must wait before repossessing a property from six months to twelve months. The CCMA applies to all regulated mortgage lenders, except credit unions.

The Central Bank and Financial Regulator is seeking views on proposed amendments to the CCMA. Submissions on the proposed changes from interested parties should be made by 3 September 2010 with a view to publishing the revised CCMA by November 2010. All submissions will be published on or Comments and queries should be sent to