Keeping your home with an Alternative Repayment Arrangement
27th May 2020
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An Alternative Repayment Arrangement (ARA) is an informal solution, meaning an arrangement is achieved outside of the courtroom. ARAs are the most common arrangement type for borrowers restructuring their mortgage loans, according to the Central Bank.
What does a borrower’s journey look like if they choose to pursue an ARA? It is different for everyone. An ARA will be created based on a borrower’s personal situation. As a result, arrangement outcomes must be taken on case by case basis.
The following infographic accounts for the most common steps a borrower may encounter on their journey towards achieving an ARA solution and getting to stay their home through Abhaile.
Stage 1: Borrower before encountering the Abhaile scheme:
Step 1: Borrower is in late-stage mortgage arrears and is unable to make the repayments on the mortgage loan, with the situation unlikely to change in the future. Late stage mortgage arrears is considered to be 720+ days by the Central Bank. If you are in mortgage arrears by more than a few years, help and support is still available through Abhaile.
Step 2: Borrower receives a legal letter following their exit from the Mortgage Arrears Resolution Process (MARP) and goes to court. They meet an Abhaile Court Mentor from MABS and a Duty Solicitor. The Court Mentor is present at all Circuit Court possession hearings to explain what is happening in the Court. The Duty Solicitor may be able to explain to borrowers what is happening in the proceedings and in some courts, can speak on behalf of a borrower.
Stage 2: Borrower works with a Dedicated Mortgage Arrears (DMA) Adviser under Abhaile:
Step 1: Borrower calls the MABS Helpline on 0761 07 2000 or visits their local MABS office.
Step 2: Borrower works with a MABS DMA Adviser to complete a Standard Financial Statement (SFS) to determine possible arrangements.
Step 3: The DMA presents all possible arrangements to the borrower.
Step 4: Borrower reviews all the options and decides to pursue an Alternative Repayment Arrangement (ARA). With the support of the DMA, the borrower presents the ARA proposal to their lender.
Step 5 Lender accepts the borrower's ARA proposal.
Stage 3: Borrower begins the ARA process under Abhaile:
It is important to note there are different types of ARAs; they can vary as it works on a case by case basis.
Step 1: In this case, the ARA combines clearing the arrears by adding them to the remaining sum of money borrowed for the mortgage loan. Then paying the mortgage over a longer-term which will reduce the monthly repayments.
Step 2: Borrower receives a clear, written explanation of how the ARA works.
Step 3: The ARA begins on a trial basis to determine if the new arrangement can work.
Step 4: Borrower begins to make payments outlined in the ARA.
Step 5: Borrower keeps up payments and keeps their family home.
The ARA should also explain what happens if the borrower cannot keep up payments. There be an option to review and trial a new ARA.
Please Note:This infographic is provided as an aid to highlight one example of a borrower’s journey through Abhaile. Every borrowers’ circumstances are unique, meaning the journey towards a solution will be dealt with on a case by case basis, by experienced regulated qualified professionals. This does not represent legal advice.
If you or someone you know is in mortgage arrears, please reach out to the free supports available to you through Abhaile. Get started by calling 0761 07 2000 and speaking with an adviser today.
Glossary of Terms
Court Mentor: Will be present and able to tell you what is happening in the Court, what other supports are available to you.
Dedicated Mortgage Arrears Adviser: Will provide free mortgage debt advice and support and refer you to other free professional services.
Duty Solicitor: May be able to speak for you in Court, to explain what steps you are taking to try and deal with your mortgage arrears. May also be able to explain to you what is happening in the proceedings.
Mortgage Arrears Resolution Process (MARP): The MARP is a framework that sets out rules of how the lender must deal with borrowers when they enter into mortgage arrears or are in pre-arrears.
Principal: The original sum of money borrowed on a loan.
Standard Financial Statement (SFS): A document used to summarise a person's income and outgoings, along with any debts they owe to determine what arrangements are available.