This briefing summarises recent legislation, cases and trends relevant to ongoing efforts to resolve the mortgage arrears crisis.
Recent legal and regulatory developments relevant to the mortgage arrears crisis have included:
the Irish Courts being given the ability (following the enactment of the Personal Insolvency (Amendment) Act 2015) to overturn a secured creditor's decision to reject a borrower's proposal for a Personal Insolvency Arrangement (PIA) under the Personal Insolvency Act 2012 (see our recent briefing ( New Court Review Process Available for Rejected Personal Insolvency Proposals) for further details); and the reduction in the Irish bankruptcy term from 3 years to 1 year (see our recent briefing, ( Bankruptcy Term Reduced to 1 Year) for further details). This should reduce instances of 'bankruptcy tourism' and encourage more debt settlements outside of formal proceedings. RECENT CASES
Recent cases in the mortgage arrears space deal with four main issues:
Effect of non-compliance with the CCMA Recent cases have followed the Supreme Court decisions in Irish Life and Permanent plc v Dunne & Irish Life and Permanent plc v Dunphy1 , holding that failure to comply with the Code of Conduct on Mortgage Arrears (CCMA) will not affect a lender's entitlement to an order for possession unless the lender has not complied with the moratorium provisions in the CCMA. In Stepstone Mortgage Funding Limited v Hughes, the Court granted an order for possession on the basis that that the lender had waited well in excess of the 12 month moratorium before taking repossession proceedings. The Court held that, while it considered CCMA compliance by the lender to be more formulaic than substantive, the moratorium provisions of the CCMA had been complied with and the order for possession should be granted.
CCMA Clarifications The courts have helpfully clarified two issues that have frequently caused confusion under the CCMA: in Danske Bank v Higgins, the Court held that while the CCMA prohibits a lender from taking repossession proceedings without going through the MARP process, it does not prevent them from seeking judgment. This is consistent with our view that the CCMA is focused on repossession of a family home and does not prevent a bank from seeking other remedies not involving repossession, which could include not only seeking judgment but also taking action to enforce against other assets unrelated to the family...