The Government said that for the time being there is no need to revise the code of conduct that governs the behaviour of mortgage lenders to their distressed customers in arrears.
The Central Bank’s so-called Code of Conduct on Mortgage Arrears was put in place as the arrears crisis reached its peak six years ago. Concerns have mounted since regulators earlier this year gave the green light to vulture funds to buy large amounts of non-performing loans home loans for the first time.
The fears arose because the US equity funds have had a controversial record in dealing with businesses whose loans they bought from the main banks. But Finance Minister Paschal Donohoe confirmed that his March request to the Central Bank to review the home mortgage code had found there was no need to change the code at this time.
He told reporters he would keep the terms under review, as the equity funds prepare to take control over large parts of the Irish mortgage loan books.
The Minister repeated the long-standing advice of the Central Bank and the banks that distressed customers should engage with their lenders.
The main lenders currently control 93% of all residential mortgage loans, but that share will likely fall sharply as vulture funds buy distressed loans in the coming months. Asked if he thought the review was too early, Minister Donohoe said he didn’t believe so and that it was “a matter that needs to be kept under review”.