New mortgage book legislation will secure consumer protection for Irish homeowners
Published 21/07/2014 | 12:31
New legislation will be brought in by the end of the year to make companies that buy mortgage books observe consumer protection rules.
Thousands of homeowners have had their mortgages sold on to unregulated funds.
This means they lose valuable consumer protections policed by the Central Bank.
Now the Department of Finance is planning to changes made to existing legislation that will mean that any firm that buys a mortgage book will have to apply to be regulated by the Central Bank.
Today it started a public consultation process, calling for views on the plans.
Department officials are proposing that funds that buy mortgage books will have to become what are called retail credit firms.
The legislative changes will force funds that buy up mortgage books here to honour the Central Bank’s code of conduct on mortgage arrears and decisions made by the financial services ombudsman. The legislation is not retrospective, but it will apply to funds that have already bought loan books, the Department of Finance said.
It comes after Bank of Ireland confirmed it was selling a tranche of its ICS mortgages to a currently unregulated fund.
More than a half a dozen loan books have been bought out by funds that are not regulated by the Central Bank.
Funds do not need to be regulated to buy existing loans - only to offer new ones.