The mainstream banks and building societies remain fully committed to working constructively with those of their customers who are experiencing genuine difficulty with their mortgage repayments. This commitment is reflected in the findings of a themed inspection on arrears and repossessions handling where the Financial Regulator found that the mainstream banks and building societies “had better practices in place for managing arrears, in particular with regard to customer contact”.
Both individually and collectively through the Irish Banking Federation (IBF), banks and building societies have implemented a wide range of forbearance measures to support their customers through these challenging times. The collective measures include the following:
- The IBF Pledge to Homeowners makes clear that legal action to repossess a home will not be commenced by IBF creditors provided the customer talks with the lender at the earliest opportunity so that a mutually-acceptable arrangement can be agreed, maintained and reviewed thereafter on a regular basis.
- The IBF/MABS Protocol on Debt Management enables IBF creditors and MABS money advisers to work together effectively to help personal customers to address and manage debt problems and, wherever possible, to formulate a mutually-acceptable, affordable and sustainable repayment plan.
- A new website – www.helpinghomeowners.ie – provides relevant information and guidance to mortgage borrowers who may be experiencing financial difficulties. The initiative is in partnership with the country’s 12 mainstream mortgage lenders.
The significance of these various forbearance measures is reflected in the most recently-published (March’10) statistics from the Financial Regulator for Q4 2009. These show:
- a 52% fall in the number of cases where legal proceedings have been issued to enforce the debt/security on a mortgage – down from 481 in Q3 2009 to 233 in Q4; and
- a fall-off in the number of repossessions in the same period – 27 on foot of a court order, down from 31); 74 voluntarily surrendered/abandoned (down from 79).
According to IBF, the same statistics show that, while sub-prime lenders account for just 2% of the total mortgage market, they account for 41% of all repossessions by court order.
“The forbearance policies and practices adopted by IBF-member banks and building societies are helping tens of thousands of consumers to work with their lenders in managing their mortgage and other debt repayments. And we are fully committed to working with all key stakeholders in continuing to make this happen – most recently through our participation in the Government’s Expert Group on Mortgage Arrears and Personal Debt Review”, states Pat Farrell, IBF Chief Executive.
Note: Irish Banking Federation (IBF) is the leading representative body for the banking and financial services sector in Ireland, representing over 70 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Felix O’Regan, IBF Head of PR and Public Affairs, tel. 6715311, 087 6481644