Important information on mortgage arrears
1. Important information for mortgage holders
This is important information which is applicable only where your loan/account is secured by your Primary Residence only.
It is never easy to think about financial difficulties. However, if times are tight and you find yourself in danger of falling behind on your mortgage repayments, it’s important to know what to do. Here we outline what you should do if this happens, what to expect from us at ACCBank and how we can work together to safeguard your Primary Residence and re-establish your financial stability. Please note that for the purposes of this, the definition of Primary Residence is as follows:-
i) the residential property which the borrower occupies as his/her primary residence in this State or
ii) a residential property in this State which is the only residential property owned by the borrower
1.1 Who does this apply to?
Any borrower who (i) feels that they cannot provide for their monthly mortgage repayment going forward and/or (ii) has already had some problems in providing for the mortgage and anticipates experiencing a difficulty with normal repayments. Arrears arise on a mortgage loan where a borrower has not made a full mortgage repayment, or only made a partial mortgage repayment, as per the original mortgage contract by the scheduled date.
1.2 What should you do?
· Talk to us – you have a responsibility to tell us about any problems you may anticipate or are already having with repayments as soon as possible. We have implemented a process called the Mortgage Arrears Resolution Process (also known as ‘MARP’) in compliance with the Central Bank of Ireland’s Code of Conduct on Mortgage Arrears (“CCMA”). The MARP acts as the framework to assist the Bank and our customers when presented with potential repayment difficulties in relation to a mortgage on a Primary Residence only. We have also appointed dedicated MARP Advisors within each Business Centre to work with you to try and reach a mutually acceptable and sustainable solution to the difficulties being experienced in providing for your mortgage repayments. Your co-operation is vital to gain the protection and benefits afforded by the CCMA.
· Keep to the revised repayment agreement – it is your responsibility to keep to any revised repayment agreement we make. If you are having problems, it is essential that you tell us immediately. Keeping in contact helps both of us to manage the situation more effectively.
· Seek independent advice – we recommend you review your budget to ensure your income is being maximised to its potential. We would urge you to take independent professional advice where necessary. Services such as those provided by your accountant, financial advisor and the Money Advice and Budgeting Service (MABS - www.mabs.ie) can be useful in this regard.
1.3 What will we do?
Talk to you – it is ACCBank policy to communicate promptly and clearly with you so that we can work with you to try and address the difficulties being experienced. Once you contact us to advise of your difficulties we will (i) send you a copy of the Standard Financial Statement (SFS) which is simply a standard document designed to assist you in providing full and clear details of your individual financial circumstances to the Bank (ii) encourage you to meet with your local MARP Advisor to allow us to explain the MARP process in detail to you and also run through the completed SFS with you to ensure we understand your financial position fully. Please click HERE to access A Consumer Guide to Completing a SFS. Once we have a better insight into your individual circumstances (with the benefit of additional information which may be required such as external bank statements, payslips etc) we will work with you to identify the best option for you which may include one of the following:-
· An interest only arrangement for a specified period
· An arrangement to pay interest and part of the normal capital element for a specified period
· Deferring payment of all or part of the instalment repayment for a period where, for example, there is a temporary shortfall of income.
· Extending the term of the mortgage, where this could make a significant difference to the monthly repayment
· Rescheduling the arrears and interest where there is insufficient capacity over the short term to clear the arrears but where repayment capacity exists to repay the capitalised balance over the remaining term of the mortgage
Any decision regarding amending the existing repayment schedule on your mortgage will ultimately be made by our dedicated specialist unit – Arrears Support Unit (ASU). Please see our MARP booklet for full and further details on our MARP Process and contact details for each of our offices.
· Fees & Charges- The Bank will commit to waiving fees and charges on domiciled accounts for primary residence mortgages for those customers who are actively and honestly engaged with the Bank (under MARP) to try and address their repayment difficulties. However, those customers who do not act reasonably or co-operate with the Bank in trying to reach a mutually acceptable and sustainable solution to the problem may lose the protection of MARP and be liable for the following charges:-
|
No |
Charge Name |
Charge Amount |
|
1 |
Surcharge Interest |
0.5% per month |
|
2 |
Referred Charge i.e. cheque lodged to account and returned unpaid |
€3.81 |
|
3 |
Referred Charge i.e. cheque, D/D, S/O presented on account and unpaid |
€6.35 |
· Correspondence – when arrears arise we will send you the following correspondence, on a stage by stage basis, to ensure you are fully aware of the position: a) First missed repayment: We will send you a letter outlining the unpaid amount and the applicable fees and charges. b) Arrears unpaid: If the arrears continue, we will send you (and any Guarantor of your mortgage) further correspondence. c) Arrears continue to be unpaid: If the arrears continue, we may send you a third letter telling you that your case may be referred to our Credit Special Asset Management Unit.
· Employ an external debt collection agency – in certain circumstances where three repayments have been missed, we may employ an external debt collection agent to act on behalf of the Bank.
· Take legal action – unfortunately, some situations deteriorate to the point where legal action is needed. Under normal circumstances where co-operation and good faith is demonstrated, we do not seek repossession of the property until every reasonable effort has been made to agree an alternative repayment schedule with you. Irrespective of how the property is repossessed and disposed of, you will remain liable for the outstanding debt, including any accrued interest, charges, legal, selling or other related costs.
1.4 If you continually break repayment arrangements
· You will be at risk of losing your home if you fail to make your mortgage repayments on an ongoing basis.
· Your credit rating may also be adversely affected.
1.5 Other useful information for mortgage holders
The Central Bank of Ireland issued a revised Code of Conduct on Mortgage Arrears on 6th December 2010 which relates to how the Bank should treat consumers in respect of their Primary Residence. A copy is available here.
The Money Advice and Budgeting Service (www.mabs.ie) provides a confidential and free service to those seeking budgetary advice and also to those seeking help to manage a heavy debt burden. In September 2009, the Bank signed up to the IBF/MABS Operational Protocol - Working Together to Manage Debt – a copy is available here.
In November 2009, the Irish Banking Federation (IBF) published a Statement of Intent as a further reassurance to homeowners who find themselves genuinely unable to maintain mortgage repayments on their principal private residence. ACCBank have agreed to and support the IBF Pledge to Homeowners and it is available to read here.
For more useful information and general guidance for mortgage holders who may be experiencing financial difficulties, check out the following websites:
Office of the Revenue Commissioners: www.revenue.ie
Social Welfare: www.welfare.ie
Central Bank of Ireland: www.itsyourmoney.ie
Citizens Information Board: www.keepingyourhome.ie
Warning: Your home is at risk if you do not keep up payments on a mortgage or any loan secured on it.
If your loan is a variable rate loan please note:-
Warning: The payment rates on this housing loan may be adjusted by the lender from time to time.
If your loan is an endowment loan please note:
Warning: There is no guarantee that the proceeds of the insurance policy will be sufficient to repay the loan in full when it becomes due for payment.
If your loan is interest only please note:
Warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period.
