Study of Mayo mortgage arrears raises concerns over lenders

AN analysis of mortgage arrears among clients of South Mayo MABS has raised a number of concerns.

The study, conducted with the assistance of Dr. Stuart Stamp of Maynooth University, identified a lack of access to the mortgage to rent scheme (MTR) which it considered as 'a viable solution to many cases in the county'.

The report stated: “This appears to result from a number of factors, principally its voluntary nature, limiting qualifying criteria and apparent lack of interest from housing associations relating to issues around location, condition and management of potential properties.”

The analysis stated that the code of conduct on mortgage arrears (CCMA) works reasonably well as a short-term measure.

But it is largely failing MABS clients in the long term because two of its provisions, which involve a decrease in the overall amount payable – namely interest rate reduction and write-down of principal – are not being applied to any material degree.

“There is also evidence of lenders issuing declarations of unsustainability, non-cooperation and, thereafter, initiating legal proceedings or seeking voluntary surrender without having exhausted all other options.

“These actions have implications for the State as a whole,” the report argued.

The study called for an amendment to the CCMA to the effect that lenders should be legally obliged to consider all options set out within the code, including a write down to current market values.

It said the lender should be required to demonstrate both to borrowers and to the regulator how their proposals were reached.

The report is recommending a re-review of the criteria for MTR from a rural perspective with consideration being given to increased flexibility around currently strict criteria “which we believe, perhaps unintentionally, is excluding distressed mortgage borrowers from the scheme in regions such as Co. Mayo.”

It also called for the establishment of a transparent, accountable and independent body to estabish current market values of properties.