Banks must support homeowners on mortgage breaks – onus on Minister to deliver
- Payment breaks must be extended for struggling mortgage holders and firms beyond September.
- Code of Conduct on Mortgage Arrears (CCMA), which sets out the guidelines on mortgage arrears, must be immediately strengthened to provide a specific list of options that may be suitable for a borrower who is in difficulty.
- Banks must stop cherry-picking alternative payment options and offer all possible alternatives to distressed homeowners as listed in the CCMA.
Labour’s Finance Spokesperson Ged Nash said the Minister for Finance needs to step up and ensure the banks support homeowners on mortgage payments whose incomes have been hit by Covid-19.
He was speaking following the publication of the Central Bank’s updated mortgage arrears figures and ahead of Minister Donohoe’s meeting with the banks today.
Deputy Nash, the Labour Finance spokesperson said:
“While those who are already on payment breaks can continue to avail of them for the remainder of the agreed period, the banks need to continue to offer the option of payment breaks to borrowers who are struggling. This crisis is far from over.
Central Bank figures do show the numbers of people on mortgage breaks is coming down, but the uncertainty ahead and the likelihood of more localised restrictions will see businesses, jobs and incomes hit over what promises to be a difficult winter. This will have a knock-on effect on the capacity of homeowners to pay their mortgages.
“Structured payment breaks must still be offered to all workers and firms especially in struggling sectors – such as the arts, sports and tourism sector – and the Covid-19 penalty interest rate must be dropped.
“People have lost their jobs or had their wages cut through no fault of their own due to COVID-19. Banks must not punish ordinary people in such circumstances, and the Central Bank and the Minister must step-in to ensure they are protected.
“We may just be at the end of the beginning of COVID-19. Mortgage holders need certainty and they need security.
“As it stands, under the Code of Conduct on Mortgage Arrears (CCMA), banks have the power to pick and choose which alternative payment options they offer to struggling households in mortgage arrears.
“This creates more stress, more uncertainty and narrows the options for a successful repayment and for people to keep their homes.
“If we are to prevent a wave of repossessions in the coming years, our highly profitable banks – in many of which the State holds a majority shareholding – must work with, not against their customers.
“The Code of Conduct on Mortgage Arrears (CCMA) must be immediately strengthened to ensure that banks must consider a specific list of options that may be suitable for a borrower who is in difficulty. Borrowers need to be protected during this time.”