Irish Mortgage Holders Organisation (IMHO) response to public consultation process on the transposition of the EU Credit Services and Credit Purchaser’s Directive into Irish law

Key Points

No. The Irish Mortgage Holders Organisation (IMHO) are of the view that the sector must be fit-for-purpose, treat consumers and financial mortgage customers fairly, and serve the needs of society and the economy. Public notaries, bailiffs and lawyers all have a role to play in safeguarding borrowers rights.
The IMHO has assisted approximately 20,000 borrowers in arrears, with a total debt of approximately €4.5 billion, in the past eight years. There must be a balance to allow customers engage with their lender in an efficient and empathetic manner, with a focus on realistic solutions and this cohort can assist in this regard.
In transposing this Directive into law, it is essential that the most vulnerable in society are protected through schemes such as the mortgage to rent scheme and that high standards of consumer protection are ensured.

  • This discretion can only be realised once the appropriate regulation is in place. For example, in recent times, the work of the Financial Services Ombudsman’s has been reduced to a blunt instrument and subservient to the needs to vulture funds, credit servicers and the wider banking sector.
    The result of this, has been a reduction in the Ombudsman’s and Regulator’s effectiveness.
    Furthermore, the Central Bank of Ireland (CBI) has traditionally not acted speedily or effectively to ensure exiting banks and remaining institutions managed customer account-transitions smoothly.

    Consumers have suffered and the CBI appears to be massively conflicted in its remit and powers. This is a concern, and the IMHO are of the view that if a robust regulator capable of widespread enforcement is not in place, then credit servicers should be prevented from receiving and holding funds from borrowers.

  • Yes. In the interest of transparency and fairness, this is crucial. The IMHO would like to see records kept and maintained for a period of at least 10 years as this allows a full holistic view of the borrower’s financial information.
    IMHO deal with cases on a daily basis where people in mortgage arrears have their mortgages and financial information sold on. Transparency around charges on a consumer arising from default is vital, all charges imposed should be justified and agreed by the Central Bank, and a regular review completed by the Central Bank to ensure charges are adhering to agreed approval levels.
    The consumer should be notified upfront by the Credit Purchasers and Credit Servicers of these charges and provided with an avenue of appeal which is in plain English and user friendly.

    A concerted effort is urgently needed from all stakeholders to reinforce the significant value of the Mortgage to Rent (MTR) initiative that safeguards the protection and rights of the consumer. Particularly if the Department of Finance are planning on a dual regulatory regime to develop a secondary market for non-performing loans.

  • This discretion can only be realised once the appropriate regulation is in place. Expanding the scope to other than non-performing loans is dependent on the scope of the Irish regulator and the full suite of Government services to have the capability, bandwidth and responsibility to work with customers who find themselves in difficulty – in an understanding and compassionate manner.
    There must be greater oversight and scrutiny from relevant Oireachtas Committees, Government Departments and Ministers, that encourages switching, consumer choice and cultivates a culture of competition.

  • This discretion can only be realised once the appropriate regulation is in place. All entities operating under this new framework must be subject to all the regulatory and enforcement powers of the State.
    In addition, there must be strict implementing of the legislation with regards to how it will treat mixed portfolios containing nonperforming loans and performing loans.

  • No. There is already a major absence of choice in the Irish mortgage market. The dearth of competition is leading to unnecessarily high mortgage interest rates, a serious lack of variety in mortgage products and poor customer services once the product has been purchased. This would not be beneficial to the Irish market.

  • No. Under no circumstance should the State allow creditors to define and or and impose charges on a consumer arising from a default. This flies in the face of fairness and logic. All charges must be applied by the CBI only. Credit servicers must not be allowed set their own fees. Ireland already suffers from some of the highest interest rates within the Euro zone and consumer confidence in the banking sector and respective institutions are at an all time low.
    This potential departure is a major worry for IMHO, not least for the fact that the loan purchaser has already purchased this loan at a discount and moreover it questions the impartiality of the consultation process.
    No lender in Ireland is required by law or regulation to provide a specific mortgage arrears solution to a distressed borrower and If the Department were to allow creditors to have jurisdiction over charges and fees, it would further exacerbate this dwindling consumer confidence.
    In the current climate the uncompetitive nature of interest rates in Ireland is pushing some consumers unnecessarily into an arrears position on their loans and mortgages, punitive charges set by credit servicers would be unjust.