The Revised Code Of Conduct On Mortgage Arrears

Author:Ms Grainne Hennessy, Orla O'Connor, Cormac Kissane and Robert Cain
Profession:Arthur Cox

The revised Code of Conduct on Mortgage Arrears 2013 (the "Revised CCMA") was published by the Central Bank of Ireland (the "Central Bank") early on 27 June 2013 - it will take effect from 1 July 2013. In its press release, the Central Bank stated that the Revised CCMA was intended to provide a "strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers".

Recent Statistics

Statistics published by the Central Bank on 21 June 2013 indicated that, of the 774,109 mortgages over primary residences in Ireland at the end of March 2013, 12.3% were 90+ days in arrears (compared to 11.9% at the end of Q4 2012) and, of the 149,395 buy-to-let residential mortgages in Ireland at the end of March 2013, 19.7% were 90+ days in arrears (compared to 18.9% at the end of Q4 2012). Further, the majority (55%) of mortgage restructuring arrangements agreed as at 31 March 2013 by banks with distressed borrowers were of an 'interest only' or 'reduced payment' nature (down from 59% at the end of Q4 2012).

Background to the Revised CCMA

On 13 March 2013 the Central Bank published:

Consultation Paper CP 63 ("CP 63"), a review of its existing Code of Conduct on Mortgage Arrears (which had last been updated with effect from 1 January 2011) its Mortgage Arrears Resolution Targets The Arthur Cox Finance Group's March 2013 Briefing, 'Resolving the Mortgage Arrears Crisis', can be found here: and the Central Bank's consultation period under CP 63 ended on 10 April 2013.

These developments followed various steps taken by the Government and the Central Bank in relation to mortgage arrears and bankruptcy, including the publication of the report of the Inter- Departmental Mortgage Arrears Working Group (known as the Keane Report) in October 2011, the signing into law of the Personal Insolvency Act 2012 (the "PIA") on 26 December 2012, the formal establishment of the Insolvency Service of Ireland (the "ISI") on 1 March 2013 and the development by the leading banks (in conjunction with the Central Bank) of their Mortgage Arrears Resolution Strategies. The announcements of March 2013 were then followed by:

the publication, by the Department of Justice, of the Land and Conveyancing Law Reform Bill 2013 on 28 March 2013 which is intended to remedy the legal issues surrounding the ability of banks to seek court orders for possession in respect of registered land which came to light as a result of the 2011 High Court decision of Dunne J. in Start Mortgages Ltd & Ors v Gunn & Ors [2011] IEHC 275. That Bill is continuing to progress through the Houses of the Oireachtas, and is expected to be enacted over the summer months the publication, on 8 May 2013, of the Central Bank's Pilot Scheme for Multi-Debt Restructuring the launch by the ISI of its website on 18 April 2013 the publication by the ISI of its Guide to reasonable living expenses and other detailed guides and sample scenarios for debt relief notices, debt settlement arrangements and personal insolvency arrangements under the PIA in April 2013 the publication by the ISI of details of the...

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