Mortgage arrears resolution schemes expected in October

Mortgage arrears resolution schemes expected in October

The Central Bank

The Central Bank has given mortgage lenders until the end of May to categorise their arrears cases and propose solutions for each category.

According to a report in today’s Irish Times, the banks will have until the end of September to develop these solutions into “products” under a Central Bank timetable. Lenders will then pilot and test the products before introducing them as part of mortgage arrears resolution schemes in October.

All banks offering mortgages have submitted arrears resolution strategies to the Central Bank showing how they intend to deal with customers who are in arrears.

Almost 14% of residential mortgages were either in 90-day arrears or had been restructured on December 31st, up from nearly 13% three months earlier, according to the Central Bank.

A Department of Finance spokesman said mortgage resolution strategies were aimed at lenders addressing arrears informally before the new personal insolvency regime took over, where judicial solutions could be applied. Under the proposed legislation, borrowers can apply for a personal insolvency arrangement where, if approved by 75% of their secured creditors, mortgage debt can be written down in out-of-court settlements.

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