Distressed mortgage holders who have gone through the mortgage arrears resolution process and are not happy with their treatment by the banks are set to become the biggest cohort of complainants to the Financial Service Ombudsman.
The office is seeing an increasing number of people coming through the mortgage arrears resolution process and emerging disillusioned that they have not received the write-off that they were hoping for.
However, the ombudsman cannot force the banks to write off any debt as there is nothing in the mortgage arrears resolution process or the code of conduct on mortgage arrears that requires the banks to write down debt.
Although the Financial Services Ombudsman, Bill Prasifka, said that every one knows that debt forgiveness is coming his office will not have a role to play in it.
“We are not empowered to deal with writedowns. All we are able to do is to check that the banks engaged in the process and explained it to the mortgage holders,” he said.
It is expected that the mortgage arrears resolution process complaints will take over from the claims over the mis-selling of payment protection insurance which has been a dominant theme in the recent Financial Service Ombudsman reports.
The number of payment protection insurance complaints will decline as the six-year guillotine on claims kicks in. Mr Prasifka said that he wasn’t against the six-year rule being changed.
However, he added that to do so would involve a change in corporate governance.
Overall Mr Prasifka said that his office was achieving its core goal of forcing the banks and other financial institutions to engage with their clients.
The change in stakeholders’ behaviour has been driven by a change in legislation by the Financial Service oOmbudsman to force complainants to bring their complaints to the bank, insurance company or investment company before they refer the issue to the ombudsman’s office.
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