Helping Home Owners

Helping Home Owners

Support for Mortgage Holders in Difficulties

The tradition of home ownership is very strong in Ireland. Successive governments facilitated home ownership in a variety of ways including in via mortgage interest tax relief. I The OECD has concluded that Ireland has one of the most ‘tax-friendly’ housing environments in the world. Banks and Building Societies which are registered with the Financial Regulator must under the Code of Conduct on Mortgage Arrears make every reasonable effort to agree an alternative repayment schedule with borrowers who find themselves in difficulties.

Registered lenders are required under the terms of the Code to give consideration to alternatives such as deferral of payments, extended terms of mortgage, changing the type of mortgage or capitalising arrears and interest.

On the 5th February the Financial regulator wrote to all mortgage lenders informing them that from 17th February the Statutory Code of Conduct on Mortgage Arrears has been amended where arrears have arisen on a borrower’s primary residence. The Regulator’s initiative followed a request from the Minister for Finance that the ‘waiting period’ be doubled as a means of taking pressure off mortgage holders who were experiencing difficulties.

Registered lenders are now required to allow at least 12 months from the time arrears first arise before applying to the Courts to commence legal actions.

In addition to the Code of Conduct, the Irish Banking Federation has announced that its members will hold off on legal action against those in difficulty as long as the borrowers who are in difficulties stick to mutually acceptable arrangements that are put in place to deal with the debt. These arrangements are subject to six monthly reviews.

Advice for mortgage holders with problems is available through the Money Advice Budgeting Services (MABS).

The Money Advice Budgeting Services (MABS) provides a free, confidential and independent service for people who find themselves in difficulties particularly with mortgage arrears.

The Government has recently increased the advisory services provided through the Money Advice Budgeting Services (MABS).

The Irish Banking Federation and MABS have agreed an operational protocol which will enable MABS and the Irish Banking Federation to work closer with each other, to help people who find themselves in difficulties.

In addition to the advice and guidance through MABS the Government, in the most recent budget, refocused mortgage interest relief on those who bought their homes at the peak of the market.

The Government is also providing financial support to over 15,000 families, through the Mortgage Interest Subsidy Scheme.

With an eye to the longer term the Government has established a Review group on Mortgage Arrears. Headed up by the Department of Finance the Group is examining problems arising from both mortgage and non-mortgage debt, considering measures to assist people with mortgage arrears to keep possession of their family home and examining measures adopted in other countries to deal with this problem. The Group will report on a rolling basis on the most sensible and effective way to deal with these problems.