Mortgage Arrears

Due to the economic recession, more and more people are finding it very difficult to meet their mortgage repayments. As a result many have fallen into arrears or are afraid they will shortly do so.

If you are struggling with your repayments, our advice is the following:

1. Bear in mind that banks generally behave reasonably and will listen to your story and give you time to sort things out. The last thing they want to do, if they can avoid it, is repossess a house. Bear in mind that under the Mortgage Arrears Resolution Process (MARP), the banks cannot take any legal action against you for a year where you are co-operating with them. Therefore, keep calm and try not to worry.
2. It is very important that you contact your mortgage provider and inform them of your position. We would advise you to write to your mortgage provider and if a repayment option is agreed over the phone, make sure to follow this up in writing.
3. Do not ignore any contact from your mortgage provider. It is very important that they are made fully aware of your situation.
4. Be sure to keep a copy of all correspondence between you and your mortgage provider.
5. Contact your Community Welfare Officer at the Local Heath Services Executive Office as you may be eligible for Mortgage Interest Supplement. It provides short-term support to help with mortgage interest repayments. A person who is unemployed or working part time (29 hours or less) may be entitled to this payment. From 18 June 2012, new applicants for the Mortgage Interest Supplement must show that they have availed of an alternative payment arrangement with their lender for at least 12 months.
6. You may have a mortgage repayment policy or some other form of insurance that offers financial support if you lose your job or otherwise experience a fall in income. You should have a look at all the documentation in relation to your mortgage and see if you have a mortgage repayment policy.
7. Contact the Money Advice and Budgeting Service (MABS) and make an appointment to see a money advisor. The money advisor will take a look at your overall financial situation and will draw up a realistic repayment plan for you and will contact the bank on your behalf.
8. If you cannot afford a Solicitor and need legal advice in relation to any debt matters, contact your local Free Legal Advice Centre. These operate across the country.

In early 2009, the Financial Regulator put a Code of Conduct in place to help deal with mortgage arrears regarding their “primary residence”. . The mortgage provider must do the following:

1. They should contact the Borrower as soon as the Borrower is in arrears and attempt to address the situation.
2. They should keep in contact with the Borrower and help develop a plan for clearing the arrears.
3. They must wait a minimum of twelve months from the time arrears first arise before bringing a repossession case against the Borrower unless the Borrower is not co-operating.
4. They cannot seek repossession of the property until every effort has been made to agree an alternative repayment schedule. An alternative repayment schedule could include interest-only arrangements or a temporary repayment break or extending the term of your mortgage in order to reduce the monthly repayment.

If you have any queries regarding the above, you can email niall.farrell@pjf.ie