Consumer Mortgage

Central Bank has published a Supplement to the Consumer Protection Code which sets new standards for supervised institutions to facilitate mortgage changes for private individuals. These amendments are applicable to supervised undertakings from 1 January 2019 and are in line with the Central Bank's August 2017 consultation on mortgage changes.

Well, our briefs on this consultative process are here. The creditor must inform a private consumer 60 working days before the end of the fixed-interest term that it will end and what the new interest will be. Initially, the central bank had suggested a 30-day reporting deadline, but thereafter the central bank agreed to prolong it to 60 working days following the consultations.

When the new interest will not be a tracking interest the creditor must give the consumer information about the other available interest levels. The Commission must also provide the private consumer with a hyperlink to the section of the Competition and Consumer Protection Commission (CCPC) website concerning the change of creditor or mortgage category.

If a private consumer has a floating interest mortgage and this mortgage is predicated on an LTV relationship, the creditor must inform the private consumer (as part of the private consumer's financial statement) whether he can move LTV interest rates band. Prior to this communication, the private consumer must carry out an up-to-date assessment and the private consumer must meet all other conditions that may be applicable to switching between LTVs.

When the private consumer is permitted to switch between LTV tapes, the creditor must ask the private consumer to get in touch with him to further talk about this. When the private consumer is not permitted to switch between LTV tapes, the creditor must inform the private consumer that lower LTV-based interest charges may be available from other creditors.

Before the private consumer takes out a mortgage from that creditor, a creditor must inform a private consumer of the possible effects of a related inducement on the costs of the private consumer's mortgage. According to the Consumer Protection Code, mortgage creditors already profit from the disclosure obligations for inducements. The amendment extends these safeguards to new and changing mortgage owners.

Typical example of such inducements are advance payments of lawyers' and other private consumer honorariums or offering a percent of mortgage redemption in the form of hard-case. Creditors must also provide the private consumer with all other relevant information that the private consumer should have when considering such an inducement.

In order to make it easier for private individuals to make comparisons between their mortgage and different mortgage types, all creditors must submit (on request) an indication of the overall interest rates on a private individual's current mortgage and the interest that would be due on a new mortgage provided by the same creditor or as a consequence of the alternate interest rates provided by the same creditor.

Every creditor must make available on its website standardised information on the mortgage switchover procedure and on demand hard copy of this information. "Mortgage Brokerage Guidelines for Creditors, comprising information on the lender's brokerage procedure, an account of the associated regulatory procedure and how the creditor will contact the individual consumer or his attorneys, and the lender's insurer needs; " Claim Form; " Information on time limits for considering mortgage claims; " A reference to the appropriate section on the CCPC website that deals with the change of creditors or the nature of the mortgage.

In order to prevent confusions, the suggestion made in the consultations, which the creditor confirms in the context of this standardised information as to whether rejecting an offer would adversely affect the creditworthiness of the private consumer, has been deleted. Within 5 workingdays from the date of filing the claim, the initial creditor is obliged to send repayment numbers to the private consumer or his statutory agent.

There were 3 working days suggested in the consultative document, but the central bank agreed to prolong it to 5 workingdays, after receiving the replies to the consultative document. New lenders will be obliged to keep private consumers informed throughout the changeover as follows (these standards are largely similar to those suggested in the consultations, with some slight differences):

" Confirm that you have received a filled out request within 3 workdays. "If a request is not complete, confirm it within 3 working days and indicate which extra documentation or positions are needed. "Inform the individual consumer of his choice within 10 working days following reception of all the necessary documentation and information (if he is not able to take a choice within this time, he must give the individual consumer an indicative time frame for a choice).

" Once the request is accepted, tell the individual consumer what documentation they need to conclude the drawing procedure. Clear contractual points for retail customers considering changing their mortgage or otherwise having mortgage issues must be available to both current and new creditors.