BANKS are now in full control when it comes to dealing with people in mortgage arrears, consumer groups said today.
They were reacting to new rules issued by the Central Bank which set out how lenders are to deal with those behind on the home-loan payments.
The revised mortgage arrears code abolishes the previous limit of three contacts per month from banks to customers in arrears and introduces a three-month notice period before a bank moves to seek a repossession order.
Banks will also be able to get homeowners to give up their good-value trackers as part of a restructuring deal.
The Free Legal Aid Centres (FLAC) said banks were now fully in control of their customers who are in arrears.
Director general of the legal rights body Noeline Blackwell said: “Lenders will control how they deal with arrears more than they ever did before.
“It is likely to result in borrowers in arrears coming under considerable pressure to accept whatever alternative offer is made to them by their lender, if one is made to them at all.”
Financial experts expect a rise in the number of repossessions as a result of the changes to mortgage code.
And the PIBA (Professional Insurance Brokers Association) said banks would dictate how people are treated.
“There is nothing ambiguous about this, the banks hold all the aces. This is a travesty for mortgage holders in difficulty,” she said.
“It is clear from the revised code that lenders are being supported at policy level with a drive back to achieve profitability with indecent haste, regardless of the consequences on mortgage holders.”