Friday 22 September 2017

Parlon slams banks' mortgage 'chicanery'

Roisin Burke

Construction industry boss Tom Parlon lashed out at banks for what he called mortgage-lending "chicanery".

The three-month 'use it or lose it' clause that Mr Parlon says the banks are attaching to mortgage lending is "starving mortgage seekers and small builders".

"When you get mortgage approval, you have just three months to use it," he said. "After that you have to go back to the bank and get approval all over again. Then the bank will seek a revaluation of the house, and if the valuation is reduced, that means the home buyer has to come up with a higher loan-to-value amount.

"Banks are going on about approving mortgages, but all of this chicanery is causing a major blockage."

The Construction Industry Federation (CIF) wants to see the mortgage approval deadline stretched. "We've sought a mortgage approval period extension to six or 12 months," Mr Parlon said.

The CIF met Central Bank Governor Patrick Honohan last Monday. "We had a private word regarding the banks and supporting new mortgages. All the chicanery you have to go through to get a mortgage makes life very difficult," Mr Parlon said.

"The Central Bank should use the influence it has over the pillar banks in relation to this mortgage conditionality. We plan to meet the chief executives of the main pillar banks immediately on this."

Real mortgage lending would boost the construction industry through extensions, refittings and appropriate newbuilds, said Mr Parlon.

"Other benefits to the economy include solicitor and conveyancing spend, and VAT."

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