MABS and BPFI agreement – what does it mean for borrowers in arrears?

13th November 2019

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The Money Advice and Budgeting Service (MABS) and the Banking Payments Federation Ireland (BPFI) have introduced a number of new rules to help borrowers resolve their home mortgage arrears. The rules are set out a framework that applies to borrowers in three different stages of mortgage arrears:

1. Borrowers in very late stage mortgage arrears (720+ days).

2. Borrowers who have exhausted the Mortgage Arrears Resolution Process (MARP).

3. Borrowers who have entered the legal process.

The agreement has been introduced to ensure that mortgage lenders, be it banks or credit servicing firms/funds, and MABS will work together to settle disagreements between the lender and borrower relating to mortgage arrears on their home. The new rules will see borrowers in mortgage arrears benefit, but what do those benefits look like?

• Borrowers will work with a Dedicated Mortgage Arrears (DMA) Adviser from MABS. These advisers fully qualified and experienced professionals in negotiating arrangements that help keep borrowers in their homes.

• DMA’s can also refer eligible borrowers to the Abhaile scheme, where they can access the services of a Personal Insolvency Practitioner and work towards achieving a Personal Insolvency Arrangement.

• Third parties who have bought a mortgage account must employ a Credit Servicing Firm to manage the account. This means borrowers will still be protected by the Code of Conduct on Mortgage Arrears (CCMA) regardless of who owns their mortgage account.

• There is an emphasis on making the communications process seamless. The best way to contact the relevant people with the lenders Arrears Support Group (ASU), and how to escalate a case where urgent or exceptional issues arise. This means borrowers know exactly who they should be speaking with and where they can find them.

• There is an emphasis on full disclosure of all information by all relevant parties involved in a borrower’s case. This means nothing can be hidden from the borrower and vice versa.

• When a borrower’s case is adjourned in the courts, lenders and DMAs are required to work together in that timeframe and seek to find a possible arrangement, including ones that do not involve a court process. This gives a borrower valuable time to help them work towards an arrangement.

• If a borrowers case must go through the courts and they are determined to be a vulnerable customer under the Consumer Protection Code 2012 , the lender and the DMA must work together to understand how best to proceed with the case. This means that if a borrower must go through the courts, they will still be supported by DMAs from MABS the whole way through.

A new leaflet titled ‘If Your Mortgage Is Sold to a Third Party’ has been created to accompany the new agreement. You can read about the agreement that came into effect in October 2019 here.

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