In the UK the face of regulation has changed dramatically and the implementation of the Mortgage Market Review (MMR) in April 2014 adds to the issues lenders need to consider.
In Ireland, lenders have also faced a barrage of new or amended regulatory requirements and we are taking the opportunity to list some of the issues they face. We are working with lenders, lawyers and debt resolution firms in Dublin, to help manage some of these issues.
The revised Code of Conduct on Mortgage Arrears (CCMA) came into effect on July 1st. The objective of the revision is to strengthen the codes protection of borrowers by providing fair, transparent treatment through the delivery of long term forbearance options whilst supporting timely and effective resolution for lenders. The main changes include new definitions for ‘non co-operation’ and treatment practice, a revised communications framework and a reduction of the moratorium term on legal proceedings. Interestingly the code now includes the implementation of some contentious rules around the removal of tracker products; whereas previously a tracker product was applied for the entire mortgage term, lenders now have the ability to remove the tracker as a last resort when restructuring and only where the lender can demonstrate a clear financially advantageous option has been offered to the borrower.
The Personal Insolvency Act 2012. Prospective practitioners have been undertaking their educational and examination programmes to assure appointment by the Insolvency Service of Ireland, which has only recently taken ownership of the regulation of qualified persons. The full force of the act is yet to be felt as lenders continue to migrate borrowers into informal debt settlement arrangements.
The Land and Conveyancing Law Reform Act 2013. The long awaited resolution to the unintended consequences of the Land and Conveyancing Reform Act 2009 (known as the Judge Dunne ruling on the Start Mortgages Case) has just come into effect. Under the 2009 act, if a loan went into default but demand for full payment was not made until after December 1, 2009, the lender could not apply for repossession. The 2013 Act now provides for the mortgagee’s right to obtain possession by way of summary proceedings, allows the appointment of a receiver and facilitates a sale as mortgagee in possession for loans created before 1 December 2009. However, any lenders seeking possession by way of summary proceedings which were initiated before the 2013 Act need to recommence proceedings if the lender wants the benefit of the revised provisions.
It remains to be seen how lenders will deal with this situation; potentially there are hundreds of cases that could now be lined up for re-possession, which could flood the market place and hamper any positive recovery signs.