Covid-19 mortgage suspension will not be extended - Banking Federation chief

The chief executive of the Banking Federation, Brian Hayes has said that there will be no extension to the Covid-19 mortgage suspension.
Covid-19 mortgage suspension will not be extended - Banking Federation chief

The chief executive of the Banking Federation, Brian Hayes has said that there will be no extension to the Covid-19 mortgage suspension.

People who have availed of the payment break should realise that if they miss the deadline of 30 June to have their application processed then they will “fall into another category” Mr Hayes told RTÉ radio’s News at One.

It was important that people realised that the framework put in place by financial institutions in Ireland had come from the European Banking Authority (EBA) and “must be done and dusted effectively by 30 June.”

That date is the cut off line put in place by the EBA, he added.

“We have to follow their guidance.”

Mr Hayes said there will be very significant engagement between banks and customers.

“It started last week by asking people, number one, can they go back and pay their mortgage, if not, do they need another three month extension, could they pay interest only or part capital, part interest?

“At the end of that six month period the same question will arise to people. Can they begin to pay their mortgage again?

"In the normal course of events lenders have a very clear process in place, what we call CCMA process, that the Central Bank of Ireland has put in place for lenders who have got into difficulty - at the end of that six month period there will be a full assessment done and it will happen effectively in advance of that six month period where they will be much bigger engagement for people.”

Mr Hayes said the process was well regulated and there was a four-step process – from engagement to assessment of needs by the mortgage holder, a significant financial statement and an assessment by the bank.

Then there will be “some kind of resolution in terms of an alternative repayment arrangement.”

When asked if it was possible the Covid-19 suspension would be extended, Mr Hayes said: “No, the six month period is the six month period, that's why it's important if people aren't in by 30 June they fall out of the Covid-19 category which is a European category that we're following, for people who get to the end of the six month period and still who cannot afford to pay their mortgage, there will have to be very intensive engagement with their lender to work out some alternative arrangement.”

There will not be a further extension, “that's the clear view coming from the European regulator,” he added.

“But I would make the point, even if people get to that point, who've gone through the six months and still can’t afford to pay - banks deal with this every day, we've put in place in the last decade over 100,000 mortgage restructures for people.”

Mr Hayes said there was significant knowledge within the Irish banking sector about restructuring mortgages as 85,000 of the 100,000 were “working okay.”

As the lockdown ends and people go back to work confidence will be restored and people will be able to pay their mortgages again, he said.

“If not they will have to put alternative arrangements in place - that is the normal regulated way to deal with people who fall into difficulty.”

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