No protection for mortgage holders under proposed legislation, says Irish Mortgage Holders Organisation

The Home Repossession Bill disguised as the Land and Conveyancing Law Reform Bill (LCLR Bill) 2013 will begin its passage before the Oireachtas. Pdf Land and Conveyancing Law Reform Bill 2013 (Draft)

Based on our experience with helping struggling homeowners during the current crisis, The Irish Mortgage Holders Organisation makes the following suggestions for changes to this very important piece of legislation.

Mortgage Holders have not been accorded any real protection with in this Bill. It’s Designed to correct a flaw in the law, the LCLR Bill 2013 will assists banks in repossessing family homes and other property without having shown any evidence of dealing effectively with the mortgage(s) arrears and debt sustainability issues relating to the borrower.

Mortgage holders have not been given access to any public or equivalent private system to assist them negotiate with their lender to try and avoid repossession and this will add to significant economic, social and psychological distress, both at the individual borrower level and collectively, across the Irish society.

Many of those who will be facing the repossession of their family home may not be able to afford to pay for the services of a professional insolvency practitioner. Those less well-off will be more open to having their home repossessed irrespective of there being any sustainable option to restructure their debt either informally through the bilateral arrangements with the banks or formally through the insolvency system.

The Court should be allowed to consider the conduct of both parties in the context of code of conduct in mortgage arrears during repossession proceedings. The Code of Conduct should be admissible in repossession proceedings and treated on par with any documentation supplied by the banks in support of their requests.

In order to prevent matters escalating to repossession, the Central Bank of Ireland should have the mortgage appeals process inside the Central Bank and within the consumer protection function or outside the Central Bank under the expanded powers of the Financial Services Ombudsman.

The appeals system should not, as is proposed in the new code of conduct, rest inside each bank. The appeals panels should include, in all cases, an independent representative of the public with no connection to the banks, the financial services regulatory and supervisory authorities, and to any other party involved in the appeal.

The appeal time frame should be extended to four months from the two months proposed.

Debtors should get the same protection as given via the insolvency system from all creditors.

When being adjourned for the borrower to retain the services, a PIP should be paid for by the bank as its highly likely the borrower will have no means to afford the services of a PIP.

Legal costs should be capped at a fraction of those applied in the Circuit Court.

The IMHO position on the above proposals is driven by the practical experience in dealing with distressed borrowers and is reflective of the reality on the ground.

David Hall
Director, Irish Mortgage Holders Organisation

Dr. Constantin Gurdgiev
Director, Irish Mortgage Holders Organisation

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