Wednesday, March 13 17:26:59
The Government and Central Bank have "thrown mortgage holders to the wolves" of the banking system, the Irish Mortgage Holders Organisation said today in reaction to the new initiatives on arrears.
It said the plan will place additional stress on mortgage holders and give more power to banks without an appropriate safety net or independent arbitration for mortgage holders.
"The latest plan lacks any prescriptive solutions and allows banks to determine the nature, the extent and the application of all solutions while setting the terms and conditions with out any supervision. The plan delivers no improvement in transparency of solutions to be offered to borrowers by the lenders and provides no protection for borrowers against potential abuses by the lenders of their powers."
While the review of the code of conduct is to be welcomed, the IMHO said, the review fails to deliver a meaningful improvement to the previous practices and does not allow for an effective protections for borrowers.
"Mr Elderfield's statement claiming that the regulator intends to remove the current cap on number of times a bank is allowed to contact or call or visit a borrower ahead of there view of the code of conduct is very concerning. In our view, the central bank is underestimating the extent to which the banks are willing to go to pressure borrowers. It also pre-empts the actual review of the code of conduct for mortgage arrears."
"The borrower is exposed and has been afforded no protection in this plan. The lenders are incentivised to maximise the rate of extraction of savings and income from the already distressed borrowers prior to completion of any long-term forbearance or restructuring agreements, thus reducing the effective relief that can be accorded the borrower in the end."