Trouble paying your Mortgage? Know Your Rights

Your mortgage is probably the biggest and most important financial commitment that you have. In Ireland today, record numbers of mortgage holders are in arrears. If you cannot keep up your mortgage repayments, your lending institution (bank, building society or local authority) may eventually seek to repossess your home.
If you are having difficulties paying your mortgage, then you must talk to your lending institution immediately. Your lender must take certain actions, and repossessing your home will be the last option they are willing to take.

Four Important steps in facing up to your debt;

1.Assess your situation. Make a list of all your debts. Check that each debt is in your name. Identify the debts needing immediate attention (for example, your mortgage arrears). Get in touch with the lenders immediately - preferably in writing. There are sample letters on the MABS website.


2.Make out a budget. List how much money is coming into your household each week (or month) and how much is going out. You can then work out how much you can afford to offer towards paying your debts and how you can best plan your spending in the future. You can get blank budget sheets and spending diaries from the MABS website or through the helpline.

3.Deal with the debt. Write to the lender, making an offer of the amount you can afford to pay and explaining your financial situation. The MABS website has sample letters and blank financial statements.

4.Organise a method of paying the agreed amount. You can do this in various ways, such as direct debit, internet banking or a MABS Budget Account.
 
Two statutory codes of conduct govern how mortgage lenders should deal with mortgage arrears. They are the Financial Regulator's consumer protection code, which has been in force since 2007, and the Financial Regulator's Code of Conduct on Mortgage Arrears, which came into effect in February 2009, and was updated in February 2010.
 
The Financial Regulator’s Consumer Protection Code applies to all home loan providers operating in Ireland. The code provides that the lending agency must:

Contact you as soon as it becomes aware that your mortgage account is in arrears even if the arrears are quite small
The lending agency must have in place a procedure for handling accounts which are in arrears.
This means that lenders are required to agree a remedial action plan with you as soon as they detect arrears starting to emerge and to try to assist you to manage your financial commitments and not allow the situation to worsen.

The Financial Regulator Code of Conduct on Mortgage Arrears came into effect on 27 February 2009, and an amended version came into effect on 17 February 2010. The code builds on the Regulator's Consumer Protection Code (described above) and on a voluntary code that had been developed by the Irish Banking Federation. It applies to all mortgage lenders, not just banks. Its main requirement is that lenders must wait for a specified time from the time mortgage arrears arise before taking any legal action. Initially they had to wait at least 6 months but with effect from 17 February 2010 they have to wait at least 12 months from the time the arrears arise.

However, the 12-month requirement does not apply if a borrower is deliberately not engaging with the lender

Legal Advice
You may wish to get legal advice on your options and on what happens if the mortgage lender takes steps to repossess your home. The Free Legal Advice Centres (FLAC) provide free legal advice from a nationwide network of voluntary advice centers